US retail sales declined by 0.1% month-on-month (m/m) after 6 months of fairly strong recovery. Retail sales decreased by 0.3% month-on-month (mom).
Statistics
Real growth averaged 4.4% from Dec 10 - 15, slightly less at 3.8% from Dec 15 - 19, and 4.1% from Dec 10 - 19. From February 2020 through October 2023, the U.S. managed to return the average annual growth rate to its pre-crisis level of 4.2%.
However, in the last two years, the average annual rate was 1.6%, and in the most recent year it was 1.7%. In other words, after stabilizing due to the growth of unsecured demand in 2020 - 2021 on the wave of fiscal stimulus, the rate has fallen 2.5 times from normal.
There is a pronounced slowdown, but it is premature to talk about a crisis.
Industrial Production
It is worth noting that industrial production in the US in October declined by 0.7% year-on-year (y/y), which was the strongest decline since February 2021. The post-crisis recovery period is over, and it has not translated into an expansion in production.
The manufacturing sector has been relatively stable for 15 - 16 years, expanding just 1% since October 2007.
There has already been a similar episode in history when the manufacturing sector remained flat from 1922 to 1938, although there were sharp ups and downs during that period. From 1939 to 1945, the industrial sector grew 3.5 times due to the government defense order and comprehensive industrialization.
Conclusion
In conclusion, the recent decline in retail sales and stagnant industrial production in the US indicate a marked slowdown in economic growth. While the country has managed to return to pre-crisis growth rates over the past two years, the average annual growth rate has declined significantly, largely due to the unfunded demand growth in 2020 - 2021 caused by fiscal stimulus measures.