U.S. Retail Sales Suffer Steepest Decline in Ten Months amid Record Inflation

Shoppers exit a Target store during Black Friday sales in Brooklyn, New York, November 26, 2021. (Brendan McDermid/Reuters)

U.S. retail sales dropped at the fastest rate in ten months in December, indicting that surging inflation is stifling consumer activity, in another blow to the Biden administration’s economic legacy.

Advance estimates of U.S. retail and food services sales declined 1.9 percent in December, from $639,067 billion to $626,833 billion, after a revised increase from October to November by 0.2 percent, the Commerce Department reported Friday.

While the numbers accounted for seasonal variation and holiday and trading-day differences, they did not adjust for price increases that continues to constrain American wallets more each month. Since the data represents the the value of overall purchases, rising inflation has the effect of exaggerating the magnitude of sales, suggesting that consumption was even more suppressed in December than what was reported Friday.

Despite the pandemic raging on, total sales for the twelve months of 2021 were up 19.3 percent (±0.5 percent) from 2020, according to the Census Bureau.

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