Retail sales December 2021:
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Retail sales fell much more than expected in December, with soaring prices slashing spending, the Commerce Department reported on Friday.
The monthly sales report anticipated to close the year showed a decline of 1.9%, considerably worse than the Dow Jones estimate for a decline of only 0.1%.
Excluding autos, sales fell 2.3%, a figure also well below expectations of a 0.3% increase.
In addition to the weak figures for December, November’s gain has been revised down to 0.2% from the 0.3% increase initially reported.
Since sales figures are not adjusted for inflation, the data points to a slow end to what had otherwise been a strong 2021 in which sales rose 16.9% from the 2020 pandemic.
A family of shoppers walk out of Walmart with a full cart on November 26, 2021 in Westminster, Colorado.
Michel Ciaglo | Getty Images
The Consumer Price Index rose 0.5% for the month, bringing the year-over-year gain to 7%, the highest since June 1982. Wholesale prices also rose, climbing by 9.7% over the 12-month period for the largest increase in the calendar year. since the data was kept until 2010.
Online spending was the hardest hit in terms of share of overall spending, with non-store retailers reporting an 8.7% drop for the month. Sales of furniture and home furnishings fell 5.5%, and sporting goods, music and book stores were down 4.3%.
The surge in omicron cases caused damage across the board as consumer activity declined.
Restaurants and bars, which posted an annual gain of 41.3% in 2021 to dominate all categories, registered a decline of 0.8% for the month. Gas stations followed closely for the year, with a 41% increase in sales, but were down 0.7% in December as fuel costs fell. Gasoline prices fell 0.5% to close a year as sump prices climbed 49.6%.
Only two categories saw increases for the month: miscellaneous retail stores, which rose 1.8%, and building and garden supplies centers, which posted a gain of 0.9%.
A separate Labor Department report on Friday showed import prices fell 0.2% for the month, from an expected 0.2% increase, the first negative figure since August and largely due to a 6.5% drop in the prices of imported fuels.
This figure gave hope that the surge in inflation could recede, although much of this development was due to the fall in oil prices.
In recent days, Federal Reserve officials have emphasized the importance of fighting inflation, with several policymakers saying they plan to start raising interest rates as early as March. The Biden administration has joined with central bank leaders in blaming much of the blame for the price hike on factors specific to the pandemic, such as a huge demand for goods rather than services and problems supply chain.
The surge in prices, however, came as a result of unprecedented levels of liquidity injections into the economy from fiscal and monetary policy.
Retail sales December 2021:
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