The release of U.S. retail sales from the Commerce Department on Wednesday marked an end to six consecutive months of increases.
U.S. retail sales fell in November, whilst October’s figure was revised to a decline.
Total retail sales decreased by 1.1% in November from October. Meanwhile, October’s original figure of an increase of 0.3% was revised to show a decrease of 0.1%.
The 1.1% decrease in retail sales was far more than analysts had predicted. Economists predicted a 0.3% decline for November, expecting a boost from retail events such as ‘Black Friday’.
Excluding sales of automobiles, gasoline, building materials and food services, retail sales fell 0.5% in November. Dubbed the core retail sales these figures correspond most closely with the consumer spending component of gross domestic product.
The Commerce Department report revealed that the largest drop in sales was at department stores, down 7.7% in November. Sales also declined at clothing and electronic stores.
What’s Causing the Declines in US Retail Sales?
Simply put, COVID-19 is wreaking havoc on the US economy. The US is battling a fresh outbreak of COVID-19 infections, whilst the death toll from the respiratory illness climbed above 300,000 this week.
As more and more states and local governments impose new restrictions, with many malls and retail outlets closing, the number of initial jobless claims rose to a near three-month high in the first week of December. November also saw the fewest amount of jobs added in a month for six months.
The bad news? it is only going to get worse. More than 9 million unemployed and underemployed Americans will see their government-funded benefits end on December 26th as the US Congress struggles to agree on a rescue package.
The world’s largest economy is reeling from COVID-19. Whilst summer months allowed some restaurants and bars to operate under strict safety measures outside providing strong levels of employment, the cold weather of winter makes outdoor opening almost impossible.
