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Bloomberg
On the surface the rebound in US retail sales is a V-shaped recovery, but the overall figure obscures lingering economic pain across many of America’s businesses.
After a third straight monthly increase, albeit a weaker gain than expected, the total value of US retail sales has rebounded above pre-pandemic levels. But the composition of spending looks substantially different than it did at the start of the year. Gains in online sales and at grocery stores mask the fact that certain sectors — like restaurants and clothing outlets — are far from fully recovered.
“Where we’re buying from is a bit different, but we’re actually at some pretty strong numbers now,†said Stephen Gallagher, chief US economist at Societe Generale SA.
The figures highlight a rebound in consumer spending that will help the economy dig out from its worst quarterly performance since the 1940s, even if the pickup in activity fails
to extend to all retailers. While receipts at restaurants, department stores and clothing merchants remain below year-ago levels — and closures and job cuts have hit such establishments hard — those categories account for about 15% of overall retail sales.
The outlook for consumer spending in coming months remains murky, though. The extra $600 in weekly jobless benefits that have propped up incomes and spending for millions of
unemployed people in recent months expired at the end of July, and lawmakers have been in a stalemate over another aid package. A separate report showed consumer sentiment remained weak in August, increasing slightly from July but little improved from April’s pandemic low. In addition, total consumer outlays — which includes spending on goods and services — have yet to fully recover.
The Commerce Department’s report showed retail sales increased 1.2% from the prior month after an upwardly revised 8.4% gain in June. The monthly slowdown reflected declines at motor-vehicle dealers and building materials outlets, along with weaker gains at restaurants and clothing stores.
Nine of 13 major categories rose, with the biggest increase coming at electronics and appliance stores. Such sales jumped 22.9% following a 37.6% gain in June, possibly reflecting changing consumer habits such as more Americans working and learning from home. The US has yet to get the virus under control, though the spread has ebbed slightly in last couple of weeks.