Retail Sales See Sharp Drop

U.S. retail sales, a measure of purchases at stores, restaurants and online, dropped a seasonally adjusted 1.1% in November from the prior month, the Commerce Department said Wednesday. 

The Wall Street Journal reports October sales were revised to a decline of 0.1% from an earlier estimate of a 0.3% increase. Sales were up by 4.1% in November when compared with the same month a year ago.

Restaurants, department stores and vehicle dealerships all reported sharp sales declines in November, with clothing and furniture purchases falling. Purchases of groceries and building materials increased, along with online sales.

The November and October drops marked the end of several months of growth in retail spending after sharp declines earlier this year when the coronavirus pandemic triggered widespread business closures.

“Anywhere there’s crowds people stayed away from,” said Joshua Shapiro, chief U.S. economist at consulting firm Maria Fiorini Ramirez Inc. “It underscores the difficulty here till the vaccine is widely distributed,” he said.

The retail sales report and other readings on the U.S. economy suggest the recovery is slowing after a burst of growth over the summer.

Hiring growth eased in November while worker filings for unemployment benefits recently increased. Surveys of factories and service-industry companies released on Wednesday separately showed U.S. output grew at a solid pace in early December, but at the weakest pace in about three months.