NEW YORK (AP) — Retail sales in the U.S. grew a sluggish 0.3% in October, even as retailers offered early holiday discounts online and in stores.
A surge in coronavirus infections nationwide and the expiration of a $600 weekly boost to unemployment checks over the summer has slowed spending by Americans and contributed to the slowest retail sales growth since this spring when the pandemic shuttered stores, theaters, restaurants and work places.
Economists had expected sales to rise 0.5%. October’s growth was much smaller than in September, when it rose 1.6%, according to the U.S. Commerce Department.
Best Buy, Target and Walmart offered holiday deals in mid-October to piggyback on Amazon, which held its annual Prime Day sales event in the fall after it was postponed this summer due to the pandemic.
It as hoped that retailers would be able to entice Americans who to get a jumpstart holiday shopping and avoid crowds.
The weak number knocked the wind out of U.S. markets in early trading.
The Dow, which had been down about 200 points in premarket trading, tumbled 400 points at the opening bell.
Online shopping sales rose 3.1% last month, the Commerce Department said. But at clothing stores and sporting good shops, sales fell more than 4%. Department stores had a bigger drop, down nearly 5%.
The Commerce report covers only about a third of overall consumer spending. Services such as haircuts and hotel stays, which have been badly hurt by the pandemic, are not included.