by Anne D’Innocenzio , The Associated Press
Americans beset by a lack of product options, rising prices and the arrival of Omicron, Americans sharply cut their spending in December, as early purchases in the fall fueled this year’s holiday shopping season.
The US Commerce Department said Friday that retail sales fell 1.9% seasonally from November to December when sales rose 0.3%. Sales jumped 1.8% in October, as shoppers worried about product shortages ramped up their holiday shopping.
Nevertheless, retail sales grew 16.9% last month compared to December 2020, the Commerce Department said on Friday. For the full 2021, sales grew 19.3% over the previous year.
The decline in spending was spread across several sectors. Department store sales fell 7%, restaurant sales fell 0.8% and online sales fell 8.7% over the previous month, according to the report.
Omicron was identified by the World Health Organization in late November, and the Commerce Department’s December report is the first to capture some of its effects on consumer behavior.
The monthly retail report covers only a third of total consumer spending and doesn’t include money spent on things like haircuts, hotel stays or plane tickets, all of which are more worrying about COVID-19. Upon closing the tail of the business. In November, restaurant sales rose 1% – the sector’s best performance since July.
Industry analysts suspect that shoppers who waited until the last minute and didn’t get what they wanted and took a pass or that they bought gift cards wouldn’t show up in retail data until those cards were redeemed. Don’t go
There is also a unique era in which we are living, which has skewed many economic indicators. Many economists believe the pandemic has thrown off the seasonal adjustment of retail sales, which has broken US spending patterns. The seasonal adjustment is intended to make up for the general spike in shopping in December for the holiday season. This year, however, because of the famous shortage, Americans began shopping early for the holidays, and seasonal adjustments could exaggerate any December return.
And Americans haven’t shied away from spending this year. They are spending their money differently, but spending more, not less.
The National Retail Federation is crunching last month’s sales figures and will release its reports for November and December on Friday. The country’s largest retail trade group has forecast record-breaking growth of anywhere between 8.5% and 10.5% compared to the same two months last year.
Mastercard Spending Pulse, which tracks all types of payments, including cash and debit cards, reported late last month that holiday sales rose 8.5% from November 1 to December 24 compared to a year earlier. This was the fastest speed in 17 years.
“Consumer spending will continue to be a cornerstone of economic growth this year, but the near-term path will be unstable amid rising cases of Omicron,” said US economist Lydia Boussour at Oxford Economics. Bousauer believes spending should resume in the spring due to strong wage growth and savings, after a soft patch in the first quarter.
Amherst Pierpoint chief economist Stephen Stanley agreed, pointing to a strong labor market and largely stalled demand and “a mountainous pile of extra cash to spend”.
“Once the Omicron wave fades, people will spend again,” Stanley predicted.
The Omicron version has led to widespread staff shortages, so people are sick, including in the retail sector, and the lack of supplies has reduced it to store shelves. Stores and restaurants have reduced hours of operation or are closed on previously open days.
This week, Lululemon warned that fourth-quarter sales and profits were likely to be at the low end of its expectations as it grapples with Variant’s results.
CEO Calvin McDonald said, “We started the holiday season in a strong position, but have experienced many of the consequences of the Omicron version, including capacity constraints, more limited staff availability, and shorter operating hours in some locations. “
And inflation has settled at nearly every level of the economy, forcing the Federal Reserve to stop describing rising prices as “transient.”
Inflation jumped at its fastest pace in nearly 40 years last month, a 7% increase from a year ago that is fueling increased household expenses and cut wage benefits. And with the costs of homes, cars, clothing and food racing, the biggest price spikes are hitting where Americans can feel it.
Raquel Shutler, 53, who works in fashion sales, says rising food prices have had a psychological effect on her spending everywhere.
The Atlanta resident, who goes grocery shopping for her 17-year-old son and his fiancée, used to make intermittent trips to the grocery store in between big shopping trips, but those short trips now cost her $280 instead of $220. Is. She has withdrawn lunch with friends at the mall to avoid the temptation to shop there.
“I’m being too conservative,” she said. “I stopped going out on any kind of impulse.”
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