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Retail sales slump in December as high prices and shortages weigh on consumers

 | Local News

Retail sales slump in December as high prices and shortages weigh on consumers

| Local Business News | Fox News

Retail sales in the United States fell sharply in December, indicating that the worst inflation in decades is hitting consumers harder than analysts expected.

Total retail sales fell 1.9% in December, generally a robust holiday shopping month, Commerce Department data showed on Friday. The numbers are not adjusted for inflation, suggesting that the price-adjusted purchases were even lower. The consumer price index rose 0.5% in December.

The results were much worse than analysts expected. Analysts’ median estimate was that sales were flat or down just a tenth of a percentage point.

Retail sales were better than expected in September and October, suggesting concerns about inflation and commodity shortages may have pushed some purchases forward. Sales increased 0.8% in September and 1.7% in October. In an inflationary environment, shopping early can help avoid higher prices later.

November was revised down from a 0.3 percent gain to a 0.2 percent gain. The consumer price index jumped 0.8% in November, after rising 0.9% in October. This suggests that inflation-adjusted sales actually declined month over month in November.

Worse-than-expected retail sales figures were heralded by disappointing jobs figures in November and December. Many companies have likely hired early in response to early purchases and concerns about the supply chain and shipping delays that hit later. Employers added 531,000 employees to the payroll in October and there were a record 11 million job postings at the end of the month.

Excluding motor vehicles, which were scarce due to supply chain issues, and gasoline station sales, retail sales fell 2.5%. Excluding restaurant sales, retail sales fell 2.1%.

Sales fell 5.5% at furniture stores and 2.9% at electronics and appliance stores. Sporting goods stores, hobby stores, bookstores and musical instrument stores were down 4.3%. Department store sales fell seven percent. Online sales fell 8.7%.

Despite the disappointing December, sales grew strongly on a year-over-year basis. Total sales for 2021 increased 19.3%, and sales excluding cars and gas stations increased 16.5%. Department store sales increased 22.3 percent and electronics store sales increased 25.2 percent. These figures are not adjusted for inflation. Prices rose 7% in 2021, according to the Ministry of Labor. Online sales increased 13.6%. Prices for durable goods rose 16.8% and non-durable goods minus food and beverages rose 15.8%, suggesting that more than half of the increase in sales at many stores was due to higher prices.

Retail sales slump in December as high prices and shortages weigh on consumers

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