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Poor December retail sales indicate slow holiday season

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Preliminary figures aren’t reflecting a retail and food service holiday miracle.

Advance estimates of U.S. retail and food services sales for December were $353 billion, a 0.3 percent decrease from November, the U.S. Census Bureau announced today. The numbers were adjusted for seasonal variation and holiday and trading-day differences, but not for price changes.

And although December 2009 outperformed the holiday retail and food services sales nightmare that was December ’08 by 5.4 percent, total sales for 2009 decreased 6.2 percent from 2008. The final quarter of 2009, however, was up 1.0 percent from the same period a year earlier.

Economists surveyed by Briefing.com had anticipated December sales would grow 0.5 percent, CNNMoney.com reported today. Consumer spending accounts for two-thirds of U.S. economic activity, making retail sales a key indicator of the health of the overall economy.

The December numbers, however, are not the definitive answer on the holiday season; the January report will be important because it will reflect holiday gift card spending and post-holiday sales, CNNMoney.com reported.

Of the 13 different kinds of businesses looked at in the report, only three posted an increase in sales during 2009: food services and bars (0.7 percent), health and personal-care stores (3.3 percent) and food and beverage stores (0.3 percent). Gasoline stations posted the largest sales drop from 2008 (24.5 percent), motor vehicle and parts dealers’ sales declined 12.3 percent and furniture and home furnishing stores’ sales declined 11.1 percent.

To see the full report click here.