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Retail sales after surprising gain as consumers show strength despite delta fears

Retail sales after surprising gain as consumers show strength despite delta fears

Retail sales yielded a surprising gain in August despite fears that escalating Covid cases and supply chain problems would hold back consumers, the Census Bureau said Thursday.

Sales rose 0.7% for the month against the Dow Jones estimate of a 0.8% drop.

A separate financial report showed that weekly unemployment claims rose to 332,000 in the week ending September 11, according to the Labor Department. The Dow Jones estimate was 320,000.

Economists had expected consumers to reduce their activity as the delta variant continued to tear through the U.S. persistent bottlenecks in the supply chain, and it was also expected to hold costs back as in-demand goods were hard to find.

However, sales were strong for most areas during the month, with school purchases generally resulting in a pick-up in activity, especially this year as schools prepared to welcome students back after a year of distance learning.

The headline figure would have been even better without a monthly drop of 3.6% in auto-related activity; excluding the sector, sales increased by 1.8%, well above the expected gain of 0.1%.

As fears rose over the pandemic, customers turned online, with in-store sales jumping 5.3%. Furniture and home furnishings also saw a healthy increase of 3.7%, while sales of ordinary goods increased by 3.5%.

Electronics and appliance stores saw a 3.1% drop, while sports and music stores fell 2.7%.

The figures generally reflect a more resilient consumer, where sales increased 15.1% from the same period a year ago.

The surprise in the retail trade was subdued a bit with a disappointing read about demands without work.

Initial applications rose 20,000 from a week ago after setting a new low in the pandemic. Still, the four-week moving average that accounts for weekly volatility fell to 335,750, a fall of 4,250 that brought the figure to its lowest point since March 14, 2020, when the pandemic began.

Continued claims also fell and fell by 187,000 to 2.66 million, also a new low since Covid hit. The four-week moving average dropped to around 2.81 million.

However, those who received compensation under all programs actually increased just before the expiration of enhanced federal unemployment benefits. The total, however, on 28 August and thus before the expiry, increased by 178,937 to DKK 12.1 million.

This is breaking news. Please check back here for updates.

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