Consumer spending fell in December as a rise in virus cases kept shoppers away from stores. Retail Sales fell 0.7% versus the 0.2% loss expected in December after losses seen in October and November. This comes after it was reported that 500,000 workers lost their jobs in restaurants and bars, hotels, concert halls, theaters and sports arenas last month. Sales were up nearly 3% from December 2019.
Incoming president-elect Biden unveiled a $1.9T stimulus plan last night. The proposal seeks direct checks of $1,400 for most Americans, enhanced unemployment insurance of $400 a week, money for schools to reopen, a possible $15 nationwide minimum wage along with aid for state and local communities. There has been talk on Capitol Hill that this plan is just the first installment in a series of stimulus proposals.
Consumer Sentiment edged lower in early January falling to 79.2 from 80.7 in December. Political turmoil along with rising COVID-19 cases have dampened sentiment. “Consumer sentiment posted trivial declines in early January despite the horrendous rise in COVID-19 deaths, the insurrection, and the impeachment of Trump,” University of Michigan Surveys of Consumers Chief Economist Richard Curtin said in a statement.