U.S. retail sales fell further in December as renewed measures to slow the spread of COVID-19 undercut restaurant spending and reduced traffic to malls, the latest sign that the economy is losing significant momentum in late 2020.
Retail sales fell 0.7% last month, the trade ministry said on Friday. November data were revised to show that sales were down 1.4% instead of 1.1%, as previously reported. Economists polled by Reuters forecast retail sales unchanged in December.
Excluding cars, petrol, building materials and food services, retail sales fell 1
The report follows news last week that the economy lost jobs in December for the first time in eight months. Further job losses are likely in January, as new applications for unemployment benefits rose 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.
The widespread coronavirus infections and the government’s delays in approving more money to support businesses and the unemployed are behind the loss of economic momentum. At the end of December, the government provided nearly $ 900 billion in additional relief in a pandemic.
President-elect Joe Biden on Thursday unveiled a $ 1.9 trillion tax incentive plan that includes stepping up response to the virus and direct relief for households and small businesses. The proposed further easing and accelerating the introduction of vaccines is expected to increase costs and the economy in the second half of 2021.
Growth estimates for the fourth quarter are about 5% per year, which largely reflects stock building.
The economy grew 33.4 percent in the third quarter after shrinking 31.4 percent in April-June, the deepest since the government began reporting in 1947.