U.S. retail sales fell significantly more than expected in December as Americans completed their holiday shopping, according to data released Friday – including COVID-19 cases, supply chain disruptions and dozens more. has faced high inflation over the years.
Retail sales fell 1.9% in December from a year earlier, more than the 0.1% decline expected by economists, the Commerce Department said.
Excluding cars and gas, retail sales fell 2.5 percent from November.
In addition, the Commerce Department revised its earnings for November to 0.2%, down from the originally reported 0.3%.
The decline in December also came after record sales in October, when retail sales rose 1.8%.
However, annual growth in retail sales in December was 16.9% year-on-year.
Data from the Department of Commerce showed a decline in online shopping activity despite the pandemic. Sales at out-of-store vendors fell 8.7% during the month.
In December, spending on furniture fell 5.5 percent, while sales of electronics and home appliances fell 2.9 percent. Sales in restaurants and bars fell 0.8%.
Americans started holiday shopping earlier than usual to take into account warnings about shipping delays during the supply chain crisis, while U.S. retailers offered holiday promotions ahead of schedule. In November, the pace of purchases began to slow as retail sales were lower than economists expected.
Supply chain problems have contributed to rising inflation, which has led to a sharp rise in the prices of daily necessities such as food and gas in recent months.
According to the latest Consumer Price Index, inflation was 7% in December, the highest level since mid-1982.
Meanwhile, retailers are struggling with staff shortages due to the Omicron option and the tight U.S. labor market. Earlier this week, Lululemon Omicron warned that it could hurt its sales in the fourth quarter.
The Federal Reserve is expected to raise interest rates three or more times this year as part of its inflation cooling strategy.