United States: Retail sales contract at sharpest pace since April in November
December 16, 2020
Retail sales declined 1.1% in November (October: -0.1% s.a. mom). November's figure marked the worst reading since April. Looking at the details of the release, sales at motor vehicle and parts dealers, and electronics and appliances stores contracted notably as did clothing, food and gasoline sales in November compared to the previous month.
On an annual basis, retail sales rose at a softer pace of 4.1% in November (October: +5.5% yoy). Meanwhile, the trend improved modestly, with the annual average growth of retail sales coming in at 0.7%, up from October's 0.6% reading.
Looking forward, the ongoing rise in Covid-19 cases, tightening restrictions in some states and the lapsing of government support measures bode poorly for consumer spending in the coming months, although a vaccine and the potential for a stimulus package before congress’ holiday recess this year and the possibility for another once Biden takes office next year offer some hope.
According to Francis Genereux, senior economist at Desjardins:
“The holiday season was expected to be hard for retailers, and November’s figures seem to underscore that point. The high incidence of COVID-19 cases in the United States and the restrictive health measures in some regions indicate that December will not improve much over November. Fortunately, the start of the vaccination campaign raises some hope for the new year.”
Author: Steven Burke, Economist