December retail sales fell 0.7 percent, adding to the growing list of data points showing the economic recovery stalling or even slipping into reverse.
Economists had expected sales to be flat through the holiday seasons.
The figure for November’s sales was also revised downward to a 1.4 percent drop, down from an earlier estimate of 1.1 percent.
With COVID-19 spreading in new and unprecedented levels across the country, economic indicators have pointed to a worrisome backslide. The country saw a net drop of 140,000 jobs in December, the first month of job loss since the early days of the pandemic.
More losses are likely in January after last week’s initial jobless claims climbed to 965,000, the highest level since August.
President-elect Joe Biden has proposed a $1.9 trillion relief package to fight the public health crisis and push the economy back into a strong recovery. He is expected to unveil a second proposal for longer-term economic growth, largely focused on infrastructure, in February.