Consumers likely continued to hold back on retail spending during the December peak of the holiday season as the country confronted a surge in coronavirus infections.
Economists surveyed by The Wall Street Journal forecast retail sales decreased a seasonally adjusted 0.1% in December from a month earlier. That would mark the third straight month of decline in the Commerce Department’s measure of spending at stores, vehicle dealerships, restaurants and online, after a stretch of growth last spring and summer.
December normally marks the peak of the holiday shopping season, but this year businesses are reporting mixed sales results. The U.S. is in the middle of an upswing in Covid-19 cases, with states such as California imposing new business restrictions and individuals limiting activities. Employers also cut jobs in December for the first time since the spring.
Real-time data shows that weakness in spending continued at the start of this year. JPMorgan Chase & Co.’s tracker of 30 million credit and debit cardholders recorded a 1.1% decline in spending from a year earlier in the week through Jan. 10.
Businesses and economists expect the next few months could be sluggish before activity picks up as more people are vaccinated and the pandemic starts to ease. Right now, infection rates remain high and vaccination programs got underway more slowly than expected.
