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Tuesday, January 25, 2022

December retail sales fell 1.9% as inflation hit US consumers

According to a report from the US Department of Commerce on January 14, US retail sales fell sharply by 1.9% in December as inflation and supply problems weighed on prices.

The disappointing results were worse than the Dow Jones estimate, which previously predicted a fall of 0.1%.

The new spike in Omicron cases is being blamed for declining consumer confidence as well as high prices.

The bad news ended what was otherwise a strong year, with post-pandemic 2020 sales rebounding with a 16.9 percent gain.

Weak online sales over the holidays were responsible for much of the downturn, with monthly sales down 8.7%.

Spending on outdoor dining also fell, having previously shown a 41.3% year-on-year increase.

The sharp decline in consumer spending last month followed a record 1.8% gain in October from the previous month.

Sales excluding auto purchases fell 2.3%, well short of the 0.3% growth forecast.

Wholesale prices rose 9.7 percent, the highest 12-month period on record since 2010.

Household goods sales fell 5.5%, while purchases of sporting goods, music and books fell 4.3%.

The rise in prices came after the US government spent trillions of dollars in stimulus measures that injected money into the economy during the pandemic.

Last month there were positive news in other sectors of the US economy.

Discount store clerks and building and garden supplies clerks increased 1.8 percent and 0.9 percent, respectively, as shoppers started growing their own produce to avoid food shortages and inflated prices.

A new report from the Labor Department on Jan. 14 showed a 0.2% MoM drop in import prices, the first since August, as opposed to an estimated 0.2% rise.

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The decline in import prices was mainly due to a 6.5% drop in world oil prices.

Gasoline prices fell 0.5% last month to close the year with gas station prices up sharply 49.6% from the previous winter.

U.S. manufacturing output fell 0.3 percent, the first decline since September, as supply chain problems continue to weigh on output, according to the Federal Reserve.

Industrial production fell 0.1% in December after rising 0.7% in November, while industrial capacity fell to 76.5% last month from 76.6% the previous month.

The consumer price index rose 0.5 percent in December 2021, up 7 percent from 2020, the highest price increase since June 1982.

Federal Reserve officials have stressed the importance of curbing inflation, with many politicians saying they expect interest rates to rise as early as March.

Christopher Waller, a member of the Federal Reserve Board, said Jan. 12 that the Federal Reserve could make three to five rate hikes this year to cope with the stronger inflation seen in 40 years.

Meanwhile, President Joe Biden has blamed much of the blame for rising prices on strong consumer demand for goods, rather than problems with services and supply chains.

To follow

Brian S. Jung is a native and New Yorker with a background in politics and the legal field. Graduated from Binghamton University.

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World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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