Retail sales decline for the third consecutive month

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Retail sales fell 0.7% in December from the previous month. Economists polled by Refinitiv predicted stable sales. The Commerce Department also revised November retail sales downward, from a drop of 1.1% to a decline of 1.4%.

The US economic recovery has been hit hard in the final months of 2020, and the retail sector has not been spared. Rising Covid-19 infections and renewed lockdowns, along with job losses, have weighed on consumer spending and dragged down retail sales. The economy shed 140,000 jobs in December, the first drop since April.

Retail sales in December were down 4.9% in electronics and appliance stores from the previous month, 0.8% at sporting goods retailers and 0.6% in furniture and home furnishings stores.

They also fell 5.8% among online retailers, the Commerce Department said.

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

Despite the recent decline in consumer spending, retail sales were still up 2.9% in December compared to the same period last year.

Some retailers have already reported holiday sales, and results in the industry have been mixed, highlighting the large gap between retail winners and losers in the pandemic.

Target (TGT) said sales increased 17.2% in November and December compared to last year. But others have struggled, like L Brands, the parent of Victoria’s Secret. L Brands’ (KG) sales fell 7% in November and December compared to the same period last year, the company said.

The second pandemic stimulus package signed late last month is expected to help retail sales recover in January and throughout the first quarter of 2021, Morgan Stanley economists projected in a research report this week. .

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