By Gabriel T. Rubin
U.S. retail sales dropped by 1.9% in December as Omicron and inflation surged, damping the end of the holiday shopping season.
December's sharp decline followed record-level retail sales that started with a 1.8% gain in October from the prior month. Sales at retail stores, online and restaurants grew 16.9% in December when compared with the same month a year ago, the Commerce Department said on Friday.
Many holiday shoppers heeded warnings about shipping delays, pushing a large share of the season's usual gains earlier in the year. Sales were down broadly across spending categories in December, with online sales dropping sharply by 8.7%.
Electronics stores declined by 2.9% over the previous month in December, while furniture and home stores dropped by 5.5%. Restaurant and bar sales dropped by 0.8%. Auto dealers saw a decline of 0.7%.
Retail sales are adjusted for seasonal variations, but are not adjusted for inflation, so the increases of the past year are dampened by historically high inflation. The consumer price index, a primary measurement of inflation, rose to 7% in December from a year earlier, the highest level since 1982.
The robust annual growth for 2021, despite the December decline, is a reflection of the torrent of consumer spending that has followed in the wake of depressed sales the prior year during the worst economic period of the Covid-19 pandemic. Retail businesses aren't likely to see the same pace of growth this year, economists say. Consumer savings has come down from high levels, and the Omicron variant is creating fresh disruptions and keeping patrons away from restaurants and bars.
Write to Gabriel T. Rubin at gabriel.rubin@wsj.com
(END) Dow Jones Newswires
01-14-22 0916ET
