FXstreet.com (Barcelona) - US retail sales have decreased larger than expected in December, with a 0.4% fall, instead of the 0.1% increase expected, as higher energy prices could have discouraged consumption, according to data by the Commerce Department.

Sales for November have been revised to a 10% increase, down from the 1.2% rise estimated previously. On the whole 2007 retail sales have risen 4.2%, a somewhat lower increase than the 5.9% rise posted in 2006.

Sales of cars and parts decreased 0.4% in December, while sales for all other products except cars and parts fell 0.4%, instead of the 0.2% expected. In November, retail sales excluding cars increased 1.7%. Gasoline station sales fell 1.7% in December, while gas sales rose 7.6% excluding sales at gas stations, all other sales increased 0.2%.

The decline of the core retail sales has been due to a 2.9% plunge in building materials sales, but, according to Ian Shepherdson, Chief U.S. Economist at High Frequency Economics, Ltd, the sless performance of the Q4 has been too weak: But whether you include building materials or not, the rise in Q4 core sales was the smallest since Q3 02, during the wave of corporate scandals.

Furthermore, the figures of chainstore sales do not paint, according to Shepherddson, a brighter outlook for the next quarter: The chainstore sales numbers suggest Q1 is slowing further. Overall consumption is unlikely to fall outright, but higher prices for energy and food, together with falling confidence, are hammering discretionary spending.