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Retail Sales Slump in December as Covid Third Wave Hits Spending

U.S. retail sales fell for a second month in December as holiday shoppers pared back on spending amid a third wave of Covid infections and new business and travel restrictions.

U.S. retail sales weakened for a second consecutive month in December, the Commerce Department said Friday, as consumers pulled back on holiday spending amid expanded pandemic job losses.

December retail sales fell 0.7% from the same period last year to $540.9 billion, the Commerce Department report noted, missing the Street consensus forecast of a flat reading. Stripping out auto and gasoline sales, retail sales fell 2.1%, while the same reading for November was downwardly revised to -1.3%. 

U.S. equity  futures extended declines following the release, with contracts tied to the Dow Jones Industrial Average indicating a 135 point opening bell decline while those linked to the S&P 500 were priced for a 12 point decline. Nasdaq Composite futures are indicating a 13 point opening bell gain.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, added 0.26% in overnight trading to extend its best week since November and trade at 90.475

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Last week's December employment report showed a net decline of 140,000 jobs over the final month of the year, with the brunt of the losses coming from the leisure and hospitality sector as hiring slowed over the holiday season amid the coronavirus pandemic's third wave surge.

The pace of hiring hasn't improved into January, either, with weekly jobless claims rising to 965,000 at the start of the year, the highest since the peak of the pandemic in March. 

Global cases, in fact, have topped 93 million this week, according to Johns Hopkins University data, with deaths approaching the 2 million mark - 385,000 of which have been recorded in the United States.