Consumers spent less than expected in July due to declining auto sales that have cooled an economy struggling to combat the effects of the coronavirus pandemic.
Retail sales rose 1.2% for the month, compared with a 2.3% rise expected from economists surveyed by Dow Jones.
However, all the news was not a disappointment: Excluding the automobile, the increase was 1.9%, higher than the 1.2% estimate. Worker productivity grew at the fastest pace in 11 years, a separate report found, growing 7.3% year-on-year in the second quarter and well ahead of Retuers̵7; 1.5% estimate.
Considered a highlight for an economy with two-thirds of activity from consumers, retail sales grew 8.4% in June, including furniture and equipment sales. The June figure was strong at 7.5% but has been revised higher.
However, those benefits cooled down as resurgence in Covid-19 cases slowed down operations.
Electronic and device sales saw a 22.9% increase in monthly sales while clothing rose 5.7% and bars and restaurants, an industry particularly hit by the coronavirus, up 5%.
Motor vehicle dealers and parts reported a 1.2% drop, reducing the number of headers. Sporting goods and book stores down 5% while home and garden suppliers reported a 2.9% drop.
Overall, it still marks the third consecutive monthly gain in the retail sector, down 14.7% in April, then rebounding 18.3% in May when it closed sharply in March. to prevent virus thawing.
Chris Rupkey, a chie financial economist at MUFG Union Bank, said the past three months showed “consumer spending has skyrocketed to a record high”. “There wouldn’t be a recession in the country if the consumers spent their minds like this.”
The future of the economy, and in particular the health of its consumers, remains a question. The extended unemployment benefits they gave displaced workers $ 600 a week, in addition to their regular benefits, which expired on July 31, and Congress seems to remain. and divided about what the next rescue package would be like.
Robert Frick, business economist at Navy Federal Credit Union, said: “As unemployment rates continue to be high, retail sales in August and fall will depend a lot on timing and level of support. government assistance more ”.
Even when GDP fell 32.9% in Q2 according to annual calculations, consumers are still responsible for 67% of spending. The unemployment rate has dropped but remains at 10.2%, while the unemployment report on Thursday also shows the picture is slowly fixing, with 28.3 million Americans still receiving benefits.