US retail sales tumble in sign economic rebound is sputtering

[WASHINGTON] US 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 as coronavirus cases surge and lawmakers wrangle over a new stimulus package.

Total retail sales decreased 1.1 per cent from the prior month, following a 0.1 per cent 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 per cent decline, and October's figure was originally reported as a 0.3 per cent increase.

Excluding autos and gasoline, sales fell 0.8 per cent, compared with estimates for a 0.1 per cent gain. So-called control group sales, which exclude food services, car dealers, building-materials stores and gasoline stations, dropped 0.5 per cent. The measure is often considered more reflective of underlying consumer demand.

The figures signal that the record pace of 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 monthly drop was most pronounced for clothing stores and restaurants, while sales at nonstore retailers - mostly e-commerce - barely rose from October.

The total retail sales figure was still 4.1 per cent above the same period last year.

BLOOMBERG