As the Omicron variant began spreading, American consumers dialed back spending at a range of retail outlets during the December holiday shopping season, according to government data released Friday.
Retail sales fell 1.9 percent in the final month of the year, the Commerce Department said, against analysts' expectations for them to be flat for the month. And November's slight sales growth was revised even lower.
The sales slump came as the US economy was grappling with high inflation that has pushed up prices for a range of goods, and as infections caused by the Omicron variant of Covid-19 began rising, creating a new challenge for businesses.
"Omicron is doing meaningful economic damage," Mark Zandi of Moody's Analytics said on Twitter. "Based on credit card data, holiday sales were gangbusters through the first week of the month. Then Omicron infections came on, and sales promptly slumped."
A wide range of retail outlets saw sales decline last month, including furniture and home furnishings stores, where they fell 5.5 percent, and nonstore retailers such as e-commerce businesses, where sales fell 8.7 percent.
With their inventories reduced by the shortage of semiconductors, motor vehicles and parts dealers reported a 0.4 percent dip, while sporting goods and hobby stores saw a 4.3 percent drop.
Despite the downbeat end to the year, sales were 19.3 percent higher in 2021 than the year before, when the US economy was still battling Covid-19 without the aid of vaccines.
Companies that saw growth last month include building materials and garden equipment dealers, where sales rose 0.9 percent, health and personal care stores, where they grew 0.5 percent, and miscellaneous store retailers, where they increased 1.8 percent.
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