NEW YORK: The United States retail sales rose 8.5% during this year’s holiday shopping season from Nov 1 to Dec 24, powered by soaring ecommerce sales, a report by Mastercard Inc says.
US e-commerce sales jumped 11% in this year’s holiday shopping season, according to Mastercard SpendingPulse report, yet again underscoring the Covid-19 pandemic’s role in transforming customers’ shopping habits.
Shoppers also rushed to stores amid supply chain concerns as Covid-19 cases surged, sending sales at physical stores up 8.1% compared with 2020, the report added.
“Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labour supply issues sending consumers online and to stores in droves,” senior adviser for Mastercard Steve Sadove said in a statement.
Holiday e-commerce sales made up 20.9% of total retail sales this year, the data showed, noting that the sector continues to see growth as consumers enjoy the ease of browsing and buying in the comfort of their homes.
Segments such as jewellery and electronics continued to post growth, with jewellery sales surging 32% and electronics sales climbing 16.2% from 2020 levels, the report said.
The SpendingPulse report tracks spending by combining sales activity in Mastercard’s payments network with estimates of cash and other payment forms but excludes automobile sales.
US auto retail sales are expected to fall in December, as supply shortages and high demand have caused prices to skyrocket, consultants JD Power and LMC Automotive said in a report released last Thursday.
Retail sales of new vehicles could fall 17.7% to 2,923,600 units from a year earlier, the report said.
“Intense demand with this limited supply is resulting in prices continuing to increase,” said Thomas King, president of the data and analytics division at JD Powers.
Auto manufacturers of all sizes are grappling with the strongest inflationary pressure in three decades, following a relentless rise in raw materials prices.
Production at auto plants rose 2.2% last month after advancing 10.1% in October. But November motor vehicle output remained 5.4% below the levels seen in the same period last year because of a global shortage of semiconductors.
Total new-vehicle sales for December 2021, including retail and non-retail transactions, are projected to reach 1,245,600 units, a 20.5% decrease from last year.
“A mild improvement in the chip shortage may be overshadowed by risk from the surge in Omicron variant Covid-19 cases,” said Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive.
The seasonally adjusted annualised rate for total new-vehicle sales is expected to be 13 million units, down 3.5 million units from 2020.
Despite the added risk, the consultants expect 2022 global light vehicle sales to improve to 86 million units, an increase of 750,000 units from last month.
The government confirmed last Wednesday US economic growth slowed in the third quarter amid a flare-up in Covid-19 infections, but activity has since picked up, putting the economy on track to record its best performance this year since 1984.
Gross domestic product (GDP) increased at a 2.3% annualised rate, the Commerce Department said in its third reading of GDP growth for the July-September quarter.
Though that was an upward revision to the 2.1% rate estimated last month, it was still the slowest pace since the second quarter of 2020, when the economy suffered a historic contraction in the wake of stringent mandatory measures to contain the first wave of coronavirus cases.
The revision reflected a bit more consumer spending and business inventory investment than previously estimated. That partially offset a downward revision to exports.
Economists polled by Reuters had forecast third-quarter GDP growth unrevised at a 2.1% pace. The economy grew at a 6.7% rate in the second quarter.
Last quarter’s slower growth pace also reflected shortages of motor vehicles amid strained global supply chains as well as a decline in pandemic relief money from the government to businesses, households and state and local governments.
Growth was also hampered by Hurricane Ida, which devastated US offshore energy production at the end of August.
The economy has, however, regained speed. Consumer spending increased solidly in October and manufacturing has been buoyant.
The trade deficit narrowed sharply in October as exports surged to a record high and businesses have been steadily rebuilding inventories.
The unemployment rate is at a 21-month low of 4.2%.
According to a Reuters survey of economists, growth this year could come in at 5.6%, which would be the fastest since 1984. The economy contracted 3.4% in 2020.
But the emerging winter wave of coronavirus infections, driven by the Delta and highly contagious Omicron variants, could significantly curb growth starting in the first quarter.
“Growth will be spectacular in the final quarter of the year stoked by white-hot consumer demand, but the economy’s path going forward into 2022 will be a rockier one as Omicron puts up some formidable social distancing roadblocks to growth,” said Christopher Rupkey, chief economist at FWDBONDS in New York.
Fourteen out of 22 industries contributed to GDP growth in the third quarter. Services industry output increased at a 3.9% rate, led by professional, scientific and technical services, finance and insurance, administrative and waste management, as well as accommodation and food services, and information.
That partly offset decreases in retail and wholesale trade.
Output in the goods-producing industries contracted at a 5.5% pace, reflecting a broad decline that was dominated by construction.
The government sector grew at a 5.1% rate, led by state and local governments. — Reuters