(Reuters) - U.S. holiday spending in 2018 grew a lower-than-expected 2.9 percent to $707.5 billion, the National Retail Federation said on Thursday, citing turmoil over trade policy and the recent government shutdown as having hurt the industry.
“All signs during the holidays seemed to show that consumers remained confident about the economy,” NRF President and Chief Executive Matthew Shay said in a statement.
“However, it appears that worries over the trade war and turmoil in the stock markets impacted consumer behavior more than we expected,” he said.
NRF’s numbers are based on data from the U.S. Commerce Department, which said on Thursday that overall December sales – including auto dealers, gas stations and restaurants – were down 1.2 percent seasonally adjusted from November but up 2.3 percent unadjusted year-over-year.
The retail group said sales in November grew 5.1 percent but in December were up only 0.9 percent year-over-year and were down 1.5 percent seasonally adjusted from November. NRF does not count October as part of the holiday season.
The numbers fell short of NRF’s forecast last fall that holiday sales from Nov. 1 through Dec. 31 would grow between 4.3 percent and 4.8 percent, to between $717.45 billion and $720.89 billion.
The holiday retail sales numbers exclude automobiles, gasoline stations and restaurants, NRF said.
The trade body also said online and other non-store sales, which are included in the overall number, grew 11.5 percent to $146.8 billion. NRF had forecast the online sector of retail would grow between 11 percent and 15 percent, to between $151.6 billion and $157 billion.
“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” NRF Chief Economist Jack Kleinhenz said.
“The combination of financial market volatility, the government shutdown and trade tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data,” he said.
Earlier this month the trade body said it expected U.S. retail sales to rise between 3.8 percent and 4.4 percent to more than $3.8 trillion in 2019, encouraged by higher consumer confidence, low unemployment and rising wages.
It also said it expects the overall economy to gain an average of 170,000 jobs per month in 2019, down from 220,000 in 2018. It said unemployment, currently at 4 percent, will drop to 3.5 percent by the end of the year.
Reporting by Melissa Fares in New York; Editing by Dan Grebler