Household spending took a tumble during December. But rather than reflecting insufficient demand, the weakness appears to be related to lower oil prices, which smashed gasoline sales during the month. The combination of lower oil prices, strong job growth and a higher US dollar should ensure that household spending bounces back in the coming months.
Retail sales fell by 0.9 per cent in December, well below market expectations, to be 3.2 per cent higher over the year. Growth in October was downwardly revised to 0.4 per cent (from 0.7 per cent last month).