• Poor U.S. retail sales sign of sputtering rebound
U.S. retail sales dropped by more than forecast in November and the prior month was revised to a decline, indicating the economic rebound is hitting bumps amid record coronavirus cases and lawmakers’ extended wrangling over a new stimulus package.
Total retail sales decreased 1.1% from the prior month, following a 0.1% October decline, the first drops since March and April, Commerce Department figures showed Wednesday. That was worse than all but one economist had forecast in a Bloomberg survey calling for a 0.3% decline, and October’s figure was originally reported as a 0.3% increase.
The figures signal that the third U. S. surge in covid-19 cases, along with the arrival of colder weather, is taking an increasing toll on the economy as governments re-impose lockdowns, with more people losing their jobs and businesses shutting temporarily or permanently. Consumers are becoming more conservative with their finances during the wait for widespread vaccine distribution and a fresh stimulus package.
“The story is pretty simple: It’s clear the shutdown and third wave are affecting activity,” particularly at restaurants, said Brett Ryan, senior U.S. economist at Deutsche Bank. “The report highlights the need for more fiscal aid.”
After months of stalemates and talks, the top congressional leaders from both parties were close to agreement Wednesday on a relief package, which they hope to attach to crucial government spending legislation and pass by the end of the week, Bloomberg News reported.
Federal Reserve policymakers also conclude a twoday meeting later Wednesday, where officials are considering whether to alter their asset purchase program to provide more support for growth.
U. S. stocks were little changed at the open, while 10- year Treasury yields were higher and the dollar was lower.
Excluding autos and gasoline, sales fell 0.8%, compared with estimates for a 0.1% gain. So- called control group sales, which exclude food services, car dealers, building-materials stores and gasoline stations, dropped 0.5%. The measure is often considered more reflective of underlying consumer demand.
The monthly drop in retail sales was most pronounced for clothing stores and restaurants, while sales at nonstore retailers -- mostly e- commerce -barely rose from October. The only other categories to record gains were building materials and food and beverage stores.