Retail Sales Fall Again

This morning, the Commerce Department said that retail sales fell 0.7% in December. Wall Street was expecting the number to be unchanged. This is the second monthly decline in a row for retail sales. This data is usually a good indicator of consumer spending.

Excluding automobiles, gasoline, building materials and food services, retail sales tumbled 1.9% last month after a downwardly revised 1.1% decline in November. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have decreased by 0.5% in November.

The report followed in the wake of news last week that the economy shed jobs in December for the first time in eight months. Further job losses are likely in January as new applications for unemployment benefits surged in the first week of the month. The data are in line with economists’ expectations for a sharp slowdown in economic growth in the fourth quarter.

President-elect Biden has announced his plans for a $1.9 trillion stimulus.

Here’s what Biden calls for:
• Direct payments of $1,400 to most Americans, bringing the total relief to $2,000, including December’s $600 payments
• Increasing the federal, per-week unemployment benefit to $400 and extending it through the end of September
• Increasing the federal minimum wage to $15 per hour
• Extending the eviction and foreclosure moratoriums until the end of September
• $350 billion in state and local government aid
• $170 billion for K-12 schools and institutions of higher education
• $50 billion toward Covid-19 testing
• $20 billion toward a national vaccine program in partnership with states, localities and tribes
• Making the Child Tax Credit fully refundable for the year and increasing the credit to $3,000 per child ($3,600 for a child under age 6)

Also this morning, JPMorgan Chase (JPM) reported Q4 earnings of $3.79 per share. That beat the street by $1.17 per share.

U.S. consumer sentiment fell to 79.2 early this month from a final reading of 80.7 in December.

Posted by on January 15th, 2021 at 11:22 am


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