Retail sales continue recovery
Although thousands of stores, restaurants and small businesses continue to face financial challenges due to the pandemic, retail sales have begun to recover from the economic downturn. According to the Department of Commerce retail report issued December 16, retail sales were down 1.1% in November from the previous month, but up 4.1% from November 2019.
The recovery in retail sales has been led by strong online sales. Non-store retail sales (primarily online) were up 0.2% from the previous month in November and up 29.2% from a year earlier
Home improvement projects during the pandemic led to strong growth in the building materials and garden supplies category, with sales in November up 1.1% from the previous month and up 18.7% from a year earlier. Automobile sales have also been one of the strengths of the retail market, although November auto sales were down 1.7% from the previous month. But auto sales in November versus a year earlier were up 6.4%.
With many bars and restaurants hampered by the pandemic, food and drinking establishments have been one of the hardest hit areas of the economy. Sales for food services and drinking places were down 4.0% in November and down 17.2% versus a year earlier. Department store sales have also suffered due to the pandemic, with sales down 7.7% in November versus the previous month, and down 19.0% versus a year earlier.
Unemployment remains high
Weekly unemployment claims increased modestly in December, as many states imposed lockdowns to counter the growing COVID-19 pandemic. Average weekly unemployment claims rose to 836,750 for the month (through December 26) from 747,625 per week in November, according to the Department of Labor.
However, the overall unemployment rate was unchanged in December at 6.7% after seven consecutive months of declines, as previously laid-off workers began returning to their jobs, according to the Department of Labor Employment Situation Report issued January 8. But the rate is still nearly double the pre-pandemic rate in February of 3.5%.
Average hourly earnings increased by $0.23 for the month to end the year at $29.81.
Most sectors post gains
Eight of the 11 sectors of the S&P 500 made gains in 2020, led by Information Technology, up 43.89%, Consumer Discretionary, up 33.30%, Communications Services, up 23.61%, and Materials, up 20.73%.
The three sectors that posted losses for the year included Energy, down 33.68%, Real Estate, down 2.17% (with commercial real estate suffering due to the pandemic), and Financials, down just 1.69% after making a strong recovering in the 4th quarter with a 23.22% gain for the quarter.
The chart below shows the results of the 11 sectors for the past month, quarter and year-to-date: