US Retail Spending Falls Short Of Expectations After 1.9% Drop In December

Americans’ spending at the end of 2021 took a blow as more would-be customers decided it was a better option to stay home out of concern over Omicron.

The Commerce Department released its monthly retail sales report on Friday and found that overall spending on restaurants and shopping tumbled by 1.9%. This finding was more than expected by forecasters, who predicted shopping would take a hit last month but only a smaller 0.9%.

Spending at restaurants posted a decline of 0.8%, with nonstore retailers reporting a plunge of 8.7% for the month. Furniture and home furnishing sales contracted 5.5% and sporting goods, music and bookstores saw a 4.3% drop.

However, restaurants posted a 41.3% annual gain in 2021 to lead all categories.

Gas stations reported a 0.7% decline in monthly sales despite fuel costs moving lower from previous highs.

Consumer inflation reached 7% last year, a high not seen for several decades. Wholesale goods inflation surged 9.7% in 2021, the largest increase since the data was first calculated in 2010.

December was the first full month since the Omicron variant of COVID-19 emerged in late November. The virus is considered more contagious than previous variants and it has driven up case numbers and hospitalizations in the weeks since it was first detected.