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WASHINGTON (Reuters) – U.S. retail sales fell for a second straight month in November, likely weighed down by raging new COVID-19 infections and decreasing household income, adding to growing signs of a slowdown in the economy’s recovery from the pandemic recession.
Retail sales dropped 1.1% last month, the Commerce Department said on Wednesday. Data for October was revised down to show sales falling 0.1% instead of climbing 0.3% as previously reported. October’s decrease was the first since April, when stringent measures to control the first wave of coronavirus cases crippled the economy.
Excluding automobiles, gasoline, building materials and food services, retail sales declined 0.5% last month after downwardly revised 0.1% dip in October. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have edged up 0.1% in October.
Data this month showed the economy, which plunged into recession in February, added the fewest jobs in six months in November. The number of people filing new claims for unemployment benefits jumped to a near three-month high in the first week of December.
The United States is struggling with a fresh outbreak of COVID-19 infections, with the death toll from the respiratory illness rising above 300,000 on Monday, according to a Reuters tally of official data. Many state and local governments have imposed new restrictions on businesses, while some consumers are avoiding shopping malls, restaurants and bars.
Restaurants moved outdoors over the summer and the arrival of cold weather is also undercutting spending.
The situation has been compounded by the loss of a weekly unemployment supplement. More than $3 trillion in government coronavirus relief is almost depleted. At least 9 million unemployed and underemployed Americans will lose government-funded benefits on Dec. 26, with Congress struggling to agree on another rescue package.
Federal Reserve officials were due to wrap-up a two-day policy meeting on Wednesday. Policymakers are expected to keep interest rates near zero and deliver a playbook for what might prompt them to pump more money into the economy.
Though a vaccine for the coronavirus is being rolled out, it could probably take a while for many Americans to be inoculated. The spiraling virus and lack of additional stimulus have cemented expectations for GDP growth well below a 5% annualized rate in the fourth quarter.
The economy grew at a 33.1% rate in the third quarter after contracting at 31.4% pace in the April-June quarter, the deepest since the government started keeping records in 1947.
Reporting by Lucia Mutikani; Editing by Andrea Ricci and Dan Burns.