U.S. retail sales fell for the second month in a row in November, likely affected by new COVID-19 infections and declining household incomes, adding to growing signs of slowing economic recovery of the pandemic recession.
Retail sales fell 1.1% last month, the Commerce Department said Wednesday. October data was revised downwards to show sales falling 0.1% instead of up 0.3%, as previously reported. The October decline was the first since April, when strict measures to control the first wave of coronavirus cases paralyzed the economy.
Excluding cars, gasoline, building materials and food services, retail sales fell 0.5% last month after revising downwards the 0.1% decline in October. These so-called basic retail sales are more in line with the consumer spending component of gross domestic product. Previously, they were estimated to have increased 0.1% in October.
This month’s data shows that the economy, which fell into a recession in February, added the lowest number of jobs in six months in November. The number of people applying for new unemployment benefits increased to a maximum of three months in the first week of December.
The United States is battling a new outbreak of Covid-19 infections, with the death toll from respiratory disease above 300,000 on Monday, according to official Reuters data. Many state and local governments have imposed new restrictions on businesses, while some consumers avoid malls, restaurants and bars.
Restaurants moved to the open air during the summer and the arrival of the cold also reduces spending.
The situation has worsened with the loss of a weekly unemployment supplement. More than $ 3 trillion in government coronavirus relief is almost depleted. At least nine million unemployed and underemployed Americans will lose government-funded benefits on Dec. 26, with Congress struggling to agree on another bailout package.
Federal Reserve officials were due to conclude a two-day political meeting on Wednesday. Politicians are expected to keep interest rates close to zero and deliver a playbook for what can drive them to spend more money on the economy.
While a coronavirus vaccine is being rolled out, it could probably take a while for many Americans to be inoculated. The spiral virus and the lack of additional stimuli have consolidated GDP growth expectations well below the annualized 5% for the fourth quarter.
The economy grew at a rate of 33.1% in the third quarter after contracting at a rate of 31.4% in the April-June quarter, the deepest since the government began keeping records in 1947.