New York — Americans struggling with a lack of product choices, rising prices, and the advent of Omicron cut spending significantly in December following a surge in early fall purchases that boosted this holiday shopping season. Did.
According to the US Department of Commerce, retail sales in December fell 1.9% seasonally from November, when sales increased 0.3%. October sales increased 1.8% as shoppers worried about product shortages got off to a good start with their holiday purchases. Still, retail sales surged 16.9% last month compared to December 2020, the Commerce Department said Friday. Overall in 2021, sales surged 19.3% compared to the previous year.
The decline in spending has spread to many sectors. According to the report, department store sales were down 7% month-on-month, restaurant sales were down 0.8%, and online sales were down 8.7%.
Omicron was identified by the World Health Organization in late November, and the December report from the Ministry of Commerce first captured some of the impact on consumer behavior.
The monthly retail report covers only about one-third of overall personal consumption and does not include money spent on haircuts, hotel stays, plane tickets, etc. In November, restaurant sales increased 1%. This is the best performance in the sector since July.
Industry analysts have been waiting to the last minute and believe that shoppers who get a pass or buy a gift card without finding what they want will not appear in retail data until those cards are used. increase.
There are also unique times in which we live, distorting many economic indicators. Many economists believe that seasonal adjustments to retail sales have been shelved by pandemics that have disrupted US spending patterns. Seasonal adjustment is intended to explain the surge in regular shopping in December during the holiday season. However, due to a well-known shortage this year, Americans may have started shopping for vacations early and seasonal adjustments may have exaggerated the December recession.
And this year’s Americans haven’t pulled back their spending. They spend their money differently, but they spend more, not less.
The National Retail Federation has calculated last month’s sales and will publish a report on Fridays in November and December. The country’s largest retail group forecasts record growth 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 at the end of last month that holiday season sales surged 8.5% year-on-year from November 1st to December 24th. It was the fastest pace in 17 years.
“Consumer spending is still a cornerstone of economic growth this year, but the short-term path will be at a loss as the Omicron incident surges,” said Lydia Busso, a US economist at Oxford Economics. .. Boussour believes that after a soft patch in the first quarter, spending should recover in the spring with significant wage growth and savings.
Stephen Stanley, Chief Economist at Amerstopia Point, pointed out and agreed with a strong labor market, huge stagnation in demand, and “an extra pile of cash to spend.”
“When the waves of Omicron disappear, people will spend again,” Stanley predicted.
Omicron variants have led to widespread labor shortages by calling for illness by people, including the retail sector, and supply shortages have reduced what makes it possible to store shelves. Stores and restaurants have shortened business hours or were closed on previously open days.
This week, Lululemon warned that fourth-quarter sales and profits are likely to reach the lower end of expectations as they are working on variant fallout.
“We started the holiday season in a strong position, but have since experienced some of the consequences of the Omicron variant, including increased capacity constraints, limited staff availability, and reduced business hours in certain locations. We did, “said CEO Calvin McDonald.
And inflation has subsided at almost every level of the economy, and the Federal Reserve has stopped describing rising prices as “temporary.”
Inflation surged at the fastest pace in nearly 40 years last month. This is a 7% year-on-year surge that has increased household costs and stopped wages from rising. And the biggest price spikes are hitting where Americans can feel it, and the cost of competition for homes, cars, clothing, and food is higher.
Raquel Schuttler, 53, who works in fashion sales, states that soaring food prices have had a psychological impact on her spending everywhere.
Atlanta residents shopping for groceries for their 17-year-old son and fiancé used to travel intermittently to grocery stores between big purchases, but now they’re on those small trips. The cost is $ 280 instead of $ 220. She regained lunch at the mall with her friends to avoid the temptation to shop there.
“I’ve been much more conservative,” she said. “I impulsively stopped going out of any kind.”
December retail sales fall 1.9% after early vacation rush | Jobs
Source link December retail sales fall 1.9% after early vacation rush | Jobs