Bad news for holiday shopping: Retail sales dropped in November
By Nathaniel Meyersohn, CNN Business
(CNN) -- Retail sales dropped last month, signaling the consumer recovery is stalling out as the pandemic worsens in the United States.
Sales fell 1.1% last month from October, the Commerce Department said Wednesday. Sales were expected to be down 0.3% month-over-month in November, according to a survey of analysts compiled by Refinitiv.
"The numbers are much weaker than expected," Gus Faucher, chief economist for PNC Financial Services Group, said in an email. "The economy looks much softer at the end of 2020."
Clothing stores, restaurants, electronics stores and gas stations led the sales decline while spending at grocery stores and online retailers ticked up.
Overall, retail sales are up 4.1% from last year. Spending at online retailers is up 29.2% from the same time last year.
Retail sales have been were aided during the pandemic by federal relief programs, but those have ended.
A supplemental $600 weekly unemployment insurance, which had been part of the government's first stimulus bill, ran out at the end of July. Since then, Congress has been unable to agree on another boost to jobless benefits.
"Without stimulus, retail sales declines will likely continue and perhaps become severe given millions of Americans will lose unemployment benefits the day after Christmas," Robert Frick, corporate economist at Navy Federal Credit Union, said in a note to clients Wednesday.
There is a wide range of holiday forecasts this year, reflecting the uncertainty around the pandemic. Real estate firm CBRE projects that holiday sales will increase less than 2% this year from 2019. Meanwhile, economists at Wells Fargo have predicted an increase of 9% as consumers shift their spending from areas like travel to toys, electronics and other gifts.
Retailers have tried to move up the holiday season to avoid in-person crowds. Traditional brick-and-mortar stores saw a 52% drop in Black Friday traffic compared to last year, according to a report from Sensormatic Solutions.
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