US retail sales fell further in December as renewed measures to slow the spread of COVID-19 lowered restaurant spending and reduced shopping to shopping, the latest sign that the economy has lost considerable speed by the end of 2020.
Retail sales fell 0.7 percent last month, the Commerce Department said Friday. Data for November was revised down to show that sales fell 1.4%, instead of 1.1%, as previously reported. Economists surveyed by Reuters had unchanged retail sales in December.
With the exception of cars, gasoline, construction materials and food services, retail sales fell 1.9% last month, after a revised downward decline of 1.1% in November. These so-called basic retail sales correspond most closely to the consumption component of gross domestic product. Previously, they were estimated to have fallen by 0.5% in November.
The report followed last week’s news that the economy lost jobs in December, for the first time in eight months. Other job losses are likely in January, as new unemployment benefits rose in the first week of the month. The data is in line with economists’ expectations for a sharp slowdown in economic growth in the fourth quarter.
Coronavirus ramp infections and government delays in approving more money to help companies and the unemployed are behind the loss of economic momentum. The government provided nearly $ 900 billion in additional aid for the pandemic in late December.
President-elect Joe Biden on Thursday unveiled a $ 1.9 trillion fiscal stimulus plan, which includes supporting the response to the virus and direct aid to households and small businesses. The proposed additional exemption and accelerated vaccine implementation are expected to boost spending and the economy in the second half of 2021.
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.