US retail sales fell in December, a sign that consumers remain cautious even though gasoline prices have dropped and there is an increased hiring of employees.
According to the Department of Commerce, retail sales fell 0.9% last month. This is the largest decline in 11 months, from January 2014.
Still, economists saw the decline as temporary, citing the strengthening labor market and lower gasoline prices.
Excluding autos, gasoline, building materials and food services sales fell 0.4 percent last month after increasing 0.6 percent in November.
Economists predicted that underlying retail sales calls, which correspond more closely with the Gross Domestic Product (GDP) consumer spending component would rise 0.4 percent last month.
Consumer spending accounts for over two-thirds of economic activity in the United States.
The surprise drop in December led economists to cut their estimates for consumer spending in the last three months of 2014 as well as the forecasts of growth for the quarter.
A second report from the Department of Commerce showed that retail inventories excluding automobiles barely rose in November.
Retail sales were pressured by declines in electronics and appliance stores, clothing, building materials and garden equipment, as well as car dealers.
Online sales also fell, as well as sporting goods stores receipts. Lower gas prices weighed on service stations sales, which fell 6.5 percent, the biggest decline since December 2008.