Retail sales slowed in the final month of 2021


US retail sales dipped more than expected in December as Americans wrapped up their holiday shopping – while also facing an uptick in COVID-19 cases, ongoing supply chain disruptions and high-inflation, according to data released Friday.

December retail sales fell 1.9% from November, the Commerce Department said – significantly more than the 0.1% decline economists had expected.

Excluding vehicles and gas and retail sales were down 2.5% from November.

In addition, the Commerce Department revised the November gain to 0.2%, down from the initial reported 0.3%.

The December downtick also followed record figures in October, when retail sales jumped 1.8%.

However, annual growth in retail sales was still up 16.9% in December compared to a year earlier.

The pandemic of online buying activity in a downtick of the Commerce Department’s data. Sales at non-store retailers fell 8.7% for the month.

Spending on furniture dropped 5.5% in December, while sales of electronics and appliances dropped 2.9%. Sales at restaurants and bars fell 0.8%.

Americans start their holiday shopping earlier than usual with a supply chain crunch, while US retailers list holiday promotions ahead of schedule. Economists’ expectations of retail sales falling short of November

People flock to a shopping mall in Santa Anita, Calif., On Dec. 20, 2021.
AFP via Getty Images

Supply chain issues have contributed to the inflation surge, which has caused the cost of everyday items like groceries and gas to skyrocket in recent months.

Inflation reached 7% in December, according to the latest Consumer Price Index data, the highest since mid-1982.

Shoppers at a mall.
Shipping delays are also contributed to the December slump.
AFP via Getty Images

Meanwhile, retailers are driven by staffing shortages driven by the Omicron variant and a tight US labor market. Earlier this week, Lululemon warned that Omicron could hurt its fourth quarter in sales.

The Federal Reserve is expected to hike interest rates three or more times this year as part of its strategy to cool inflation.

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