Retail sales in the United States fell for the third month in a row in December, as the coronavirus pandemic led buyers to pinch pennies and falls home.
Retailers and food service traders earned just under $ 541 billion last month, the lowest level since July, after declining 1.4% in November and 0.1% in in October, the U.S. Census Bureau said Friday.
The 0.7 percent drop larger than expected in December resulted in an increase in COVID-19 infections and deaths that put retailers under pressure even in the middle of the shopping season. Economists expected sales to remain flat last month, according to Wrightson ICAP.
“COVID-19 closures have sent consumers into their homes where they are too concerned about the prospects of spending a dime on stores and malls across the country,” said Chris Rupkey, chief financial economist of the MUFG Union Bank.
December retail spending was 2.9 percent higher than the previous month, but about 2.1 percent below the $ 553 billion high of 2020, which was reached in September, according to federal data.
The slowdown came despite an unexpectedly strong holiday season in which retailers recorded $ 789.4 billion in sales, a jump of 8.3% from 2019, according to the National Retail Federation.
While consumers spent more on cars, clothing and personal care products in December, online and other non-store sales fell by 5.8 percent and electronics and retailers home appliances earned 4.9 percent less, federals said.
Restaurants and bars fell 4.5 percent, while sales at food and beverage stores fell 1.4 percent, a possible sign of food insecurity among struggling Americans. to overcome it during the pandemic, according to Jonathan Silver, CEO of Affinity Solutions, a reporting and marketing solutions company.
“One of the most important contributions from current data is that the lower-income groups that had kept the economy running until the fall have begun to show spending fatigue, probably related to stagnant stimulus and the possible unemployment problems, ”Silver said.
The fall of December came when the U.S. economy launched jobs for the first time since April, as officials imposed a new round of blockade measures to combat the spread of COVID-19.
While vaccines to be rolled out across the country could help retailers recover in the coming months, “the pandemic has certainly altered our way of buying forever, so even when shop windows are reopen, e-commerce will continue to be an essential source of revenue for retailers, ”said Marwan Forzley, executive director of payment technology firm Veem.