U.S. retail sales fell 0.7% in December from the previous month, according to the latest report from the Department of Commerce. It was the third consecutive month in which there was no growth.
Economists surveyed by Reuters had expected sales to be unchanged.
“The December retail results were an absolute disaster,” Amherst Pierpont Securities chief economist Stephen Stanley said in a note. “Clearly, consumer spending slowed down sharply in November and December as the virus gained ground and forced closures of stores and restaurants in many key states.”
The Commerce Department also revised its sales estimates for November downward to show a 1.4% decline in sales instead of the previously reported 1.1%.
The report came as the Department of Labor said the U.S. economy lost 140,000 jobs in December.
The sales drops were spread broadly across the economy. In-store sales of electronics and appliances fell 4.9% month-over-month. Sporting-goods stores fell 0.8%. Sales of home furnishings fell 0.6%.
Retail sales, excluding autos, fell 1.4% in December, the sharpest decline since April.
“The further slump in retail sales in December confirms that the continued surge in coronavirus infections is now weighing heavily on the economy,” Capital Economics senior economist Andrew Hunter said.
Despite the bricks-and-mortar drop, online sales were still up more than 19% year-over-year for December.
The news sent yields on U.S. Treasuries falling from their ten-month high on Tuesday. Yields had jumped Thursday before an announcement by President-Elect Jo Biden that he would seek $1.9 trillion from Congress to spur the economy and accelerate vaccine distribution.
Federal Reserve Chairman Jerome Powell, in a virtual event Thursday, said the economy was underperforming, but, “there could be quite exuberant spending and we could see some upward pressure on prices” if and when the COVID-19 crisis is brought under control.