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US Retail Sales Fall Amid Covid-19 Spike
Dec 17, 2020 5:19 AM
By Rapaport News
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RAPAPORT... US retail sales struck a disappointing note in November due to an uptick in coronavirus cases and the lack of a second government stimulus package.
Revenues fell 1.1% month on month to $546.5 billion, though they were still 4.1% higher than in November 2019, the US Census Bureau reported Wednesday.
“Consumers held back on spending in November as virus rates spiked, states imposed retail restrictions, and congressional stimulus discussions were gridlocked,” commented Matthew Shay, CEO of the US’s National Retail Federation (NRF). “While consumers have been bolstered by increases in disposable income and savings, it’s clear that additional fiscal stimulus from Congress is needed and we are hopeful it will be passed soon as we enter the final stretch of the holiday season.”
The Census Bureau also revised its October figure to a month-on-month decline of 0.1%, compared to its previous estimate of a 0.3% increase. That means sales have declined for two consecutive months after showing positive figures for each of the previous five.
The weakness in November reflected low sales at restaurants and bars due to the virus-related restrictions, BMO Capital Markets explained in a research note. The investment bank also observed reduced spending on sporting goods, hobbies and toys, as well as at music stores, after these categories had performed strongly earlier in the pandemic.
However, grocery sales rose as Americans stayed at home, while online sales across all products increased 0.2% versus October and jumped 29% year on year, the government data showed.
“Blame it on the restrictions on movement [or] activity, waning government income assistance, concerns about getting sick, supply issues — the economic impact of Covid-19 is pretty evident,” added Jennifer Lee, director and senior economist at BMO. Nonetheless, consumers are in a good position to resume spending once the virus rules disappear, she added.
“We have to remember the remainder of the holiday season depends critically on the virus,” said Shay at the NRF. “We are optimistic, but spending could shift into a lower gear if the virus continues to spread.”
Image: A shopping mall in Marlborough, Massachusetts. (Massachusetts Office of Travel & Tourism/Flickr)
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Tags:
BMO, BMO Capital Markets, holiday season, holidays, National Retail Federation, NRF, Rapaport News, retail, Shopping, spending
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