U.S retail sales fell 0.7% in December, a third straight month, showing that the economy lost speed at the end of 2020, according to Reuters. Manufacturing production rose 0.9% after advancing 0.8% in November, the eighth-month of straight gains and above expected 0.5%
- Sales at restaurants and bars plunged 4.5%, online sales tumbled 5.8%, while receipts at electronics and appliance stores dropped 4.9%.
- Excluding automobiles, gasoline, building materials, and food services, retail sales tumbled 1.9% after a downwardly revised 1.1% decline in November
- Notable gains were recorded in auto dealerships which had a 1.9% rebound and clothing stores which saw a 2.4% increase in receipts
- The fall in retail sales was attributed to job losses and renewed measures to control the spread of coronavirus.
- Excluding autos, manufacturing output increased 1.1% while production at factories rose at an 11.2% annualized rate in the fourth quarter.
- Manufacturing activity was being supported by a shift in demand towards goods from services.
- Despite a fall in retail sales, the economy is unlikely to slip back into recession due to increasing factory production and hopes of nearly $900 billion pandemic relief passed at the end of December
- The economy is also likely to be supported by President-elect Joe Biden’s $1.9 trillion fiscal stimulus plan which could spur household spending
- Overall, the economy grew at a 33.4% rate in the third quarter, after contracting 31.4% in the April-June quarter.
U.S stocks are currently declining as the dollar gains. SPY is down 0.50%, QQQ is down 0.34%, EURUSD is down 0.44%