WASHINGTON: US retail sales fell for a third straight month in December as renewed measures to slow the spread of COVID-19 triggered job losses, further evidence that the wounded economy lost considerable speed at the end of 2020.

The downturn in sales reported by the Commerce Department on Friday is, however, unlikely to push the economy back into recession, with other data showing production at factories accelerating last month. There is also cautious optimism that nearly $900 billion in additional pandemic relief provided by the government at the end of December will offer a backstop.

The ebbing economic momentum, which appears to have spilled over into the new year, could persuade the US Congress to agree to President-elect Joe Biden’s ambitious $1.9 trillion fiscal stimulus plan, which includes bolstering the response to the virus and direct relief to households and small businesses.

Retail sales dropped 0.7% last month. Data for November was revised down to show sales tumbling 1.4% instead of 1.1% as previously reported. Sales rose 2.9% on a year-on-year basis.

The monthly decline in sales was led by a 4.5% plunge at restaurants and bars after many authorities banned indoor dining over the holiday season. Online sales tumbled 5.8%. Receipts at electronics and appliance stores dropped 4.9%.

Consumers also cut back spending at sporting goods, hobby, musical instrument and book stores as well as beverage stores. That offset a 1.9% rebound in sales at auto dealerships and a 2.4% increase in receipts at clothing stores. There were also gains in sales at building material stores as well as health and personal care outlets.

Excluding automobiles, gasoline, building materials and food services, retail sales tumbled 1.9% last month after a downwardly revised 1.1% decline in November. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have decreased 0.5% in November.

In a second report on Friday, the University of Michigan said its consumer sentiment index slipped to 79.2 from a final reading of 80.7 in December.

In a third report on Friday, the Federal Reserve said manufacturing production rose 0.9% last month after advancing 0.8% in November. That was the eighth straight monthly gain in factory production. Manufacturing is being supported by a shift in demand towards goods from services. Production at factories increased at a 11.2% rate in the fourth quarter.