Due to the surging Omnicron cases and high prices, retail sales took a dip. In early December it was projected that retail sales would drop by 0.1%, however, it fell much more than that as the monthly sales report showed a decline of 1.9%. Most categories saw a decrease this December, Online spending taking the biggest decline of 8.7%. Only two categories seeing an increase, miscellaneous store retailers and building materials and gardening centers.
Also, import prices fell 0.2%, the first negative number since August, due to the 6.5% fall in import fuel prices. That fall provides some hope that the inflation surge could be slowing, even though much of the fall came from the drop in. petroleum prices.
The Federal Reserve has been stressing the importance of stopping inflation and saying that policymakers expect to see a rise in interest rates as early as March. The Central Bank and the Biden Administration blame the rise in prices on pandemic-related factors, such as the supply chain issues and the high demand for specific goods. Though the price surge has come following cash injections from both monetary and fiscal policy.
Even through Omicron, whenever I went to the mall it was still packed. It seemed like people didn't even recognize the pandemic was getting worse and they carried on with their lives. It shocks me that retail sales dropped, but it was only by 0.1%. Personally, I know the pandemic did not effect my purchase on clothes, I just ordered online instead of going in person.
ReplyDeleteThe consumer spending is most likely down because it is after-Christmas season. People have probably spent a lot of money for Christmas and are choosing to save now in case of another lockdown or emergence of another variant of the coronavirus. Inflation may also have deterred people from spending.
ReplyDeleteThis synopsis is very interesting. It seems like it should be concerning for spending to decrease in December, which normally is the most spending happy month due to the holidays. But maybe it shouldn't be too concerning, but rather expected due to the circumstances, specifically covid. Something of note though is that online spending saw the biggest dip because I would've expected this to see the smallest dip because buying online is what consumers would prefer with the covid crisis.
ReplyDeleteTo me, the public responded to this new variant terribly. They didn't even act like it existed and it continued to worsen. All they thought about was how less abusive it was to the body and not as bad of symptoms. But, the consumer spending, at least from personal experiences, was most likely down because the holidays just ended.
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