U.S. retail sales fell in December, posting the biggest drop since September 2009 and delivering more evidence that last year's holiday sales fizzled unexpectedly. Even e-commerce suffered a big setback.
The Commerce Department said Thursday that December retail sales dropped 1.2 percent from November. They were up 2.3 percent from December 2017.
Non-store retailers, including e-commerce and mail-order vendors, saw sales tumble 3.9 percent—the most since November 2008, in the midst of the Great Recession. Coupled with the recent drop in consumer sentiment, this has some economists worried.
"What I find particularly concerning was the pullback in discretionary areas such as food/drink services, and sporting goods/hobby stores. E-commerce also took a dive," Jennifer Lee, director of economic research at BMO Capital Markets, said in a note. "These are areas that consumers, if they are worried, will step back from first."
Total retail sales for 2018 rose 5 percent from the previous year.
Stock market tumble
The stock market recorded big drops in December. And a partial shutdown of the federal government began Dec. 22, at the end of the holiday shopping season.
"The shutdown came late in the month and likely had little impact on December sales, but consumer sentiment was weaker in the month amid stock market volatility," analysts at Contingent Macro Research wrote in a research report.
Retailers had high hopes for the 2018 holiday season. But Macy's, J.C. Penney and Kohl's last month reported disappointing holiday sales. Overall, department-store sales dropped 3.3 percent in December, the most since January 2016.
The evidence of a cooldown makes it more likely the Federal Reserve will keep interest rates steady, economists say.
"With inflation contained, the Fed will be guided by the incoming activity data, which justify its 'patient' stance," Michael Pearce of Capital Macroeconomics said in a note.
-- CBS News' Irina Ivanova contributed reporting.