Retail sales fell more than expected in December. From the WSJ, here is the breakdown:

U.S. retail sales fell a sixth consecutive time in December, making a deep, broad drop that indicated worried consumers were adding to savings instead of spending at the height of the holiday season.

Separately, U.S. import prices fell less than expected in December, with a sharp drop in the price of oil and industrial supplies accounting for much of the decline.

Retail sales tumbled by 2.7% last month from the previous month on a seasonally adjusted basis, the Commerce Department said Wednesday.

Sales in November decreased 2.1%, revised down from an originally estimated 1.8% decline. October was also revised lower, to a drop of 3.4% from a previously reported drop of 2.9%.

Economists expected a 1.2% decline in sales during December.

Consumer spending makes a big part of gross domestic product, which is the broad measure of the economy. People stuck with debt, eroded asset prices, and fears of layoffs have curbed what were once-robust levels of spending. Credit for buying things is harder to get these days, too.

Automobile and parts sales dropped by 0.7% in December. November sales decreased 0.3%.

Sales of all retailers except auto and parts dealers fell in December by 3.1%. Economists expected a 1.5% decrease. Ex-auto sales in November had gone 2.5% lower, revised from a previously reported 1.6% drop.

December gasoline station sales plunged 15.9% last month. Gas sales fell 18.3% in November. Tumbling prices are lowering the value of sales and contributing to the big drops. Stripping away sales at gas stations, demand at all other retailers decreased 1.4% in December.

Excluding auto sales and gas station sales, all other retailers saw sales fall 1.5% in December.

Sales last month tumbled 1.8% at furniture retailers; 2.5% at clothing stores; 1.0% at electronic stores; 2.2% at eating and drinking places; 0.4% at sporting goods, hobby and book stores; 1.3% at general merchandise stores; 1.4% at food and beverage stores; 2.9% at building material and garden supplies dealers; and 1.9% at mail order and Internet retailers.

Sales rose 0.4% at health and personal care stores.

For some analytical reaction to the news, here is a link to the Wall Street Journal Real Time Economics site.

There is little in the numbers that is surprising and it’s hard to foresee much or any recovery at least until the fiscal stimulus plan gets rolling. To my mind this is partly about a fundamental lack of spending power on the part of the consumer and partly a matter of confidence. Being constantly hammered by reports of failing banks, collapsing world trade and potential depression does not make one inclined to go out and shop.