Retail sales growth in the United States tempered last month as the expiration of certain federal stimulus measures weighed on consumer spending.
According to the Commerce Department, retail sales climbed 0.6% to $537.5 billion for the month of August. It marked the fourth consecutive month of gains, however, August’s improvement fell short of those seen in prior months where sales were greater following steep declines in March and April when the coronavirus pandemic took hold in the U.S. July’s numbers were revised lower, from an initial reading of a 1.2% increase, to a 0.9% hike to $534.6 billion.
The report, released this morning, showed that Americans spent more on clothing and accessories, which recorded a 2.9% jump, as well as at restaurants and bars (up 4.7%), furniture stores (up 2.1%), plus on electronics and personal care (both categories up 0.8%.) On the other hand, they pulled back spending at sporting goods and hobby stores, which fell 5.7%, and on general merchandise, recording a drop of 0.4%. Non-store retailers saw no change in monthly retail sales.
At the end of July, the government’s extra $600 in weekly unemployment benefits, which had helped prop up the economy in recent months, had reached its end. Congressional leaders have yet to come to an agreement on a new package that would either modify or continue the weekly assistance. As a stop-gap, President Donald Trump approved “Lost Wages Assistance” grants, administered to states through the Federal Emergency Management Agency, that supplement $300 per week on top of an individual’s regular unemployment pay.
Early this month, the Bureau of Labor Statistics noted that American employers added nearly 1.4 million jobs in August, pushing down the unemployment rate to 8.4%. It was a welcome departure from the 14.7% high logged in April, when large swaths of the country went into lockdown to help contain the spread of the outbreak; however, it is still significantly higher than pre-pandemic levels, which typically hovered in the mid-3% range.
The most notable job gains came in some of the industries that saw the steepest cuts when economies shut down — including retail trade, professional services, leisure and hospitality, and education and health services. However, a surge in infections across certain regions have slowed the U.S. economy’s recovery and caused many businesses to shutter or reduce their hours of operation once again.