US retail sales fell further in December, as renewed measures to slow the spread of COVID-19 reduced spending on restaurants and reduced traffic to shopping malls, the latest sign that the economy has slowed down considerably in the end 2020.
Retail sales fell 0.7% last month, the Commerce Department said on Friday. November data was revised downwards to show that sales fell 1.4% instead of 1.1%, as previously reported. Economists polled by Reuters had forecast retail sales unchanged in December.
Excluding automobiles, gasoline, building materials and food services, retail sales fell 1.9% last month, after a revised downward drop of 1.1% in November. These so-called basic retail sales correspond more closely to the consumer spending component of gross domestic product. They were forecast to have decreased by 0.5% in November.
The report came in the wake of last week’s news that the economy cut jobs in December for the first time in eight months. More job losses are likely in January, with new unemployment insurance applications increasing in the first week of the month. The data are in line with economists’ expectations of a sharp slowdown in economic growth in the fourth quarter.
Rampant coronavirus infections and government delays to approve more money to help businesses and the unemployed are behind the loss of economic momentum. The government provided almost $ 900 billion in additional aid to the pandemic in late December.
President-elect Joe Biden on Thursday released a $ 1.9 trillion fiscal stimulus plan that includes enhanced response to the virus and direct relief for families and small businesses. The proposed additional relief and accelerated vaccine distribution are expected to boost spending and the economy in the second half of 2021.
The growth estimates for the fourth quarter are around an annualized rate of 5%, largely reflecting an increase in inventory.
The economy grew at a rate of 33.4% 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.