Dive Brief:

• Retail sales in December, adjusted for seasonal variation, and holiday and trading-day differences, hit $505.8 billion, a decrease of 1.2% from the previous month but 2.3% higher than December 2017, the U.S. Census Bureau reported Thursday.

• This is the largest December drop since 2009, according to The Wall Street Journal. Economists surveyed by the publication had anticipated a sales increase of 0.1% in the month.

• Sales during the month declined in nearly every major retail category, with the biggest (aside from gas stations) being a 4.9% dip in sporting goods, hobby, musical instrument and book stores. Monthly nonstore retail sales (including e-commerce businesses like Amazon) fell 3.9%, department store sales slipped 3.3%, and health and personal care sales fell 2%, according to the Bureau.

Dive Insight:

Earlier indicators suggested that holiday 2018 was by many accounts a banner year for retail. Sales grew 5.1% to more than $850 billion, the strongest in six years, according to the Mastercard SpendingPulse report published at the end of December. But the Bureau's numbers released today represent a broader picture of volatile month-to-month changes. And a drop at the end of the year didn't bode well for many department store retailers.

Nine-week holiday comp store sales plummeted 3.5% at J.C. Penney. And for Macy's, while the season started strong in November, sales weakened in mid-December and didn't recover until Christmas week, according to a statement from CEO Jeff Gennette. The results suggest that store comps are negative. Kohl's, meanwhile, reported sales comps growth of 1.2%, a metric that disappointed some investors.

Considering the Bureau's report came after a month delay due to the government shutdown, some analysts are reacting to the data with skepticism, Bloomberg reports. And while the Bureau's numbers highlight a concern for economic growth, if you look at the holiday season more holistically, sales between October 2018 and December 2018 rose 3.7%, from the same period a year ago. Economists differ in opinion on the stability of the economy for the rest of the year. There's a greater than 50% chance that a recession hits the U.S. this year, likely in the back half of the year, several economists said during sessions at the NRF Big Show.

NRF Chief Economist Jack Kleinhenz, however, emphasized during a panel at the conference, that the economy "is not falling apart."

"We expect, I expect, that we will see some slower growth in 2019, certainly due to the fact that some of the stimulus we had earlier this year will be working its way off but consumer spending remains in place," he said.