U.S. retail sales fell a seasonally adjusted 0.7% in December from the month before, a decline Wall Street analysts weren’t expecting. Sales also fell in October and November.
The report covers only about a third of overall consumer spending. Services such as haircuts and hotel stays, which have been badly hurt by the pandemic, are not included.
The unexpected decline underscores the economy’s troubles as the pandemic has worsened this winter. Employers shed jobs last month for the first time since April. And layoffs appear to be continuing, as the number of people seeking jobless benefits jumped last week to the highest level since August.
That’s left many Americans with less to spend. But the recent $600 stimulus checks sent to most Americans is expected to boost the economy in the coming months. And as vaccines are more widely distributed, economists expect the economy to rebound at a healthy pace in the second half of this year.
So far, retailers have reported mixed results for the holiday season. Big box retailer Target, which sells groceries, fashions and cleaning supplies under one roof, said sales rose during the holidays as virus-wary people seek one-stop shopping. Meanwhile, chains typically found at malls, such as Nordstrom, Victoria’s Secret, and Urban Outfitters, reported a sales drop.
The Commerce Department said sales even fell online, down nearly 6% after rising 19% for the year.