US retail sales drops 0.9% in December, more than expected

US retail sales declined 0.9% year-on-year in December, more than the 0.1% drop expected by analysts.

Commerce Department figures showed the biggest fall since January 2014 and followed a 0.4% increase in November.

Clothing and electronics were among the nine of 13 major categories that contributed to the slide.

Capital Economics economist Paul Diggle said contrary to expectations, shoppers didn’t take advantage of the boost to real incomes from lower gasoline prices.

"Even incorporating the latest drop, it looks like annualised real consumption growth in the fourth quarter was around 3.5%, which will help to generate a decent 3% gain in overall gross domestic product (GDP)," he said.