NEW YORK – Americans overlooked shortages, spiking prices and uncertainty about the omicron variant to break spending records during the critical holiday shopping season.
But figures released Friday show that after spending robustly early in the holiday season, consumers sharply slowed their purchases from November to December.
The National Retail Federation, the country’s largest retail trade group, said sales surged by a record 14.1% from November and December 2020 to the same months in 2021.
Those figures blew away the federation’s projections for growth of between 8.5% to 10.5%, and more than tripled the average gain during the last five years of 4.4%.
“After a dispiriting holiday season in 2020, most shoppers were absolutely determined to enjoy themselves, come what may,” said Neil Saunders, managing director of GlobalData.
Yet data issued by the Commerce Department showed that by the end of December, spending had trailed off sharply enough to catch economists off guard and raise doubts about the sustainability of retail sales in the face of omicron, inflation and persistent shortages of labor and supplies.
Retail sales fell a seasonally adjusted 1.9% from November to December.
Spending fell broadly across numerous sectors: Department store sales fell 7%, restaurant 0.8% and online purchases 8.7% compared with November.
Many economists expect the caution that consumers displayed last month to carry over into this year and potentially slow the economy. Still, with average hourly pay rising and unemployment rate steadily dropping, analysts say spending and growth could pick up, at least modestly, once omicron fades.