US retail sales in December dropped by 1.9 per cent as compared to November 2021, marking the largest monthly decline since February 2021, the Commerce Department has reported.
Retail sales totaled $626.8 billion in December, 16.9 per cent above December 2020, according to the report.
Noting that losses were broad-based, Diane Swonk, Chief Economist at major accounting firm Grant Thornton, noted in an analysis that the drop was “even larger” after adjusting for the 0.5 per cent advance in inflation during January 2022, Xinhua news agency reported.
Swonk also noted that the drop occurred as hospitalisations surged last winter.
“That bodes poorly for January and underscores the risk of a hard stop or contraction in growth during the first quarter,” she said.
Tim Quinlan and Shannon Seery, Economists at Wells Fargo Securities, said in an analysis, meanwhile, see the cratering in retail sales “more as a reflection of early shopping and pulled-forward demand than an Omicron impact or a seminal change in consumer activity,”
“Inflation will be a bigger headwind for consumers than Covid in 2022,” Quinlan and Seery added.
November’s retail sales were revised down from an increase of 0.3to 0.2 per cent, the Commerce Department report noted. Total sales for the October 2021 through December 2021 period were up 17.1 per cent from the same period a year ago.
The retail sales data was released two days after the US Labor Department reported that consumer prices in December continued to rise at the fastest annual pace in almost 40 years.
The consumer price index in December rose 0.5 per cent as compared to November and 7 per cent as compared to 2020, the largest 12-month increase since June 1982, according to the department’s Bureau of Labor Statistics.