UPDATED 5:15 PM PT – Friday, January 29, 2021
At the end of 2020, consumer spending fell for the second month as pandemic restrictions limited Americans’ ability to get out and spend.
According to the Commerce Department, consumer activity fell .2 percent in December, which was a lower drop than economists expected. The pullback is expected to continue as sentiment fell at the start of the year.
The University of Michigan Consumer Sentiment Index fell to 79 in January, which was down nearly a full point from December. Confidence in current economic conditions tumbled more than three points while sentiment about the next six months dipped by .6 points.
Additionally, pending home sales fell for the fourth month in a row as surging prices and shrinking supply pushed buyers out of the market. The National Association of Realtors reported the number of contracts signed to purchase a home fell .3 percent in December.
However, year-over-year sales were still more than 21 percent higher when compared to December of 2019. The midwest saw the largest drop as contract signings fell 3.6 percent while pending sales rose 3.1 percent in the Northeast.