Sales at U.S. retailers fell in November for the second month in a row and posted the biggest decline since the onset of the pandemic, showing effects of the record rise in coronavirus cases. Retail sales fell -1.1 percent last month, the government said Wednesday
Sales began falling in February at the beginning of the COVID-19 recession, per the gray shading in the St. Louis FED graph. It plunged -15 percent in April and jumped almost 40 percent to a +20 percent increase in June, as the various lockdown measures were eased and people went back to work. But oh, those holidays beginning with the Memorial Day and summer vacations that brought back the virus so that spending declined again.
Sales fell at restaurants, auto dealers, gas stations, clothing stores, department stores and places that sell home furnishings and electronics. The only segments to post higher sales were suppliers of essentials; grocers, home centers and Internet retailers — and even then the increase in receipts were small.
Bars and restaurants suffered a 4 percent drop in sales, marking the second decline in a row and the largest since April during the height of the pandemic. More people avoided going out to eat or were unable to do so because of new government limits on indoor dining or hours of operation.
Sales also fell 1.7 percent last month at auto dealers, but it has been a good year for the industry. Low interest rates have helped boost sales and more people are driving instead of taking public transportation, say the number crunchers.
This is mainly because coronavirus infection rates have barely begun to flatten the curve. The COVI-19 Project reported 1.7 million tests, 190k cases, and 2,918 deaths, 112,816 people are currently hospitalized with COVID-19 on Tuesday. Current hospitalizations are falling in the Midwest and rising in the Northeast and Western states, per the project.
But next year may be different when the vaccines reach most Americans. Federal Reserve Chair Powell on Wednesday predicted the U.S. unemployment rate would fall faster in 2021 than it previously believed, but it stuck to a cautious forecast for the broader U.S. economic recovery.
The Fed slightly raised its 2021 forecast for economic growth to 4.2 percent from 4.1 percent, reported MarketWatch, “indicating continued caution on the part of central bank officials as they wait to see how effective the new vaccines for the coronavirus perform.”
‘The official unemployment rate slid to a new pandemic low of 6.7 percent in November and has declined a lot faster than expected, but economists also say it likely underestimates the true number of jobless Americans.”
The vaccines began rolling out in the past week. Chairman Powell also said they would do whatever it takes to keep interest rates low and credit easily available to banks and businesses for maybe years to come.
As I said earlier, there is a path to economic recovery from the worst recession since the Great Recession. The Fed is on board to assist for the foreseeable future, but will congress do its part?
They are close to agreement on a bill slightly less than $1 billion that will be announced later this week. But we have to first control the pandemic.
Harlan Green © 2020
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