Retail sales fall for the third straight month

Retail sales fall for the third straight month

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Retail sales fell 0.7% in December from the previous month. Economists surveyed by Refinitiv expected sales to be even. The Department of Commerce also reviewed The November data is down from a 1.1% drop to a 1.4% drop.

America’s economic recovery has taken a hit in the last months of 2020 and the retail sector has not been spared. Increasing Covid-19 infections and renewed closure measures, as well as job losses, weighed on consumer spending and were a blow to retail sales. The economy shrugged off 140,000 jobs in December, the first decline since April.

The pandemic has forced consumers to buy more online. But not even e-commerce was spared from the decline in December, down 5.8% from the previous month. However, compared to the same period a year ago, online sales are still rising by more than 19%.

Otherwise, the declines in December were wide: electronics and household stores decreased by 4.9% compared to the previous month, sports stores decreased by 0.8% and furniture and household stores decreased by 0.6% recorded.

“The further decline in retail sales in December confirms that the continuing boom in coronavirus infections is now weighing heavily on the economy,” Andrew Hunter, senior U.S. economist at Capital Economics, said in a note to clients on Friday.

Despite the recent downturn in consumer spending, retail sales rose 2.9% in December from the same time last year.

Some retailers have already reported holiday sales, and results across the sector have been mixed, highlighting the wide gap between winners and losers in the pandemic.

Target (TGT) says sales grew by 17.2% in November and December compared to last year. But others struggled, such as Victoria’s Secret’s parent L Brands. L-brand (LB) sales fell 7% in November and December compared to the same time last year, the company said.

The weak sales of retail sales do not bode well for consumer spending, which is vital to the US economy. Economists are worried that the weak end of 2020 will make a sluggish start to the new year. For gross domestic product – the broadest measure of economic growth – this could mean less growth than hoped for in the first quarter.

The second pandemic stimulus package, signed late last month, should help retail sales recover in January and during the first quarter of 2021, Morgan Stanley economists predicted in a research report this week. But the turn of the year alone will not be enough to get people to buy and stimulate the economy.

The University of Michigan’s first look at consumer sentiment in January was slightly below the expectations of economists Friday morning, with the pandemic, which includes mental and physical consequences, the best.

However, President-elect Joe Biden’s $ 1.9 billion stimulus plan, which includes additional direct checks for certain Americans, should also help boost spending.

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