By Lucia Mutikani

WASHINGTON (Reuters] – The U.S. Retail Sales fell the least in 10 Months in December. These sales were impacted by COVID-19 spiraling infections and shortages. It could also temper hopes that the economy will grow sharply during the fourth quarter.

To avoid having empty shelves and reducing sales, Americans began holiday shopping in October. Due to Omicron-driven coronavirus infection, sales could drop further in January.

Scott Hoyt is a senior economist with Moody’s Analytics (NYSE:) in West Chester. “The December weakness was probably more about the timing and level of spending,” Scott said. “Support comes from strong pre-pandemic standards, high income and ample cash as well as available credit to many consumers.

According to the Commerce Department, retail sales declined 1.9% in November. This is the worst drop since February 2021. They also rose 0.2% last month. Reuters polled economists to forecast that retail sales will remain the same. The estimates ranged between a decrease of 2.5% to a rise of 0.8%.

The unadjusted sale rose 10.0% in December after an increase of 2.5% for November. The majority of retail sales were goods and increased by 16.9% in December year-over-year.

Pandemic-related supply chain bottlenecks have caused shortages, including of motor vehicles. Also, pulling back sales may have affected the seasonal factor. This model is used by the government to remove seasonal fluctuations. Online sales fell 8.7% due to the impact of the seasonal factor.

After rising 0.2% in November, receipts from auto dealers fell 0.4%. Due to a worldwide semiconductor shortage, automobiles are still scarce.

BROAD Weakness

Electronics and appliance store sales fell by 2.9%. As gasoline prices fell, receipts from service stations dropped 0.7%. The sales at food- and beverage shops fell 0.5%.

Clothing stores sales declined by 3.1%. Sales at book, sporting, hobby and musical instrument stores also fell 3.1%

The furniture store sales fell 5.5% while the receipts from electronics and appliance shops plunged 2.9%. Sales at garden and building equipment suppliers rose 0.9%.

Restaurant and bar receipts decreased by 0.8%. Retail sales data does not include bars and restaurants. This was an increase of 41.3% over December last year.

Retail sales fell 3.1%, excluding gasoline, automobiles and building materials. The November data was adjusted lower so that core retail sales fell 0.5% rather than 0.1%, as originally reported.

The core retail sales correlate most closely to the consumer spending portion of gross domestic products.

According to economists, strong economic growth was possible due to the October surge in core retail sales.

Rubela Farooqi is the chief U.S. economics officer at High Frequency Economics White Plains. She stated, “While household spending in the fourthquarter will be stronger than in the third quarter”, but that the data show a sharp decline heading into quarter one.

Although inflation is now higher than wage growths, the spending continues to be supported by huge savings and greater job security.

The October-December quarter economic growth estimate was 7.0% annually before retail sales data. 3.3% was the pace of economic growth in third quarter.

The expected growth last year was the highest since 1984.