This post was originally published on this site
The numbers: Sales at U.S. retailers such as Target and WalMart dropped 1.9% in the final month of 2021, as omicron spread like wildfire and shoppers confronted higher prices due to shortages and soaring inflation.
Economists polled by The Wall Street Journal had forecast a 0.1% decline in December.
If high inflation is taken into account, retail sales were even more depressed in December.
Retail sales excluding auto dealers fell a sharper 2.3% last month, the government said Friday. Car sales tumbled last year after a shortage of computer chips knotted up production.
Retail sales are a big part of consumer spending and offer cues on the strength of the U.S. economy. Sales had risen sharply through most of last year before tapering off in the waning months of 2021.
Big picture: The economy suffered letdown toward the end of 2021 because of omicron. The highly contagious coronavirus strain has infected millions of people and force many to miss work.
Persistent shortages of supplies and the highest inflation in almost 40 years have also hurt. Customers can’t always find what they want and prices for many goods and services have risen sharply.
Households still have plenty of savings, however, and economists predict spending will improve if the pandemic finally starts to peter out and inflation gets brought under control.
Key details: Sales fell last month in almost every major retail category.
The biggest decline, 8.7% , took place among Internet retailers such as Amazon
AMZN,
It was the largest drop in the generally fast-growing segment in a year.
Sales also fell 7% at department stores, 5.5% at furniture stores and nearly 3% at electronics stores such as Best Buy
BBY,
Auto sales slipped 0.4%.
Receipts at bars and restaurants sagged 0.8%. Omicron discouraged people from dining out, economists say, and spurred some states to add new restrictions such as passport mandates.
The only retailers to post higher sales were do-it-yourself stores such as Home Depot and pharmacies, perhaps because of people buying more medicine and tests amid the omicron outbreak.
The retail figures are seasonally adjusted.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to decline in Friday trades. Stocks have been up and down for the past week.
