Northwest Arkansas Democrat-Gazette
U.S. retail sales rebound 7.5% in June
Retail sales rose 7.5% in June as shoppers returned to stores and restaurants, indicating the economy was bouncing back just before fresh covid-19 outbreaks forced some states to walk back reopenings.
Clothing, auto and furniture sales helped fuel more than $524 billion in spending, which puts June retail sales about 1.1% higher than a year ago, according to data released Thursday by the U.S. Commerce Department.
The retail sales report showed 10 of 13 major categories increased, reflecting solid gains in furniture, electronics and appliances, clothing and sporting goods.
June’s retail numbers showed the complicated nature of an uncertain recovery.
Purchases at apparel shops jumped 105.1%, yet they’ve collapsed 23.2% from a year ago. Electronics and appliance outlets saw a 37.4%
gain.
With more restaurants and bars having opened to dine-in customers, receipts climbed 20% in June, but are still down 26.3% from last year. At the same time, sales at grocery stores decreased 1.6%. Gasoline sales soared 20% as travel and social activity picked up. Nonstore sales (including online shopping) slowed 2.4%, but are still up more than 23% year over year.
“We are cautiously optimistic that this trend will continue, but recent surges in coronavirus infections in hot spots across the country and the expiration of government stimulus programs could put a damper on the recovery in the overall retail sector in the coming months,” Moody’s Vice President Mickey Chadha said in comments emailed to The Washington Post.
Last month saw a record 17.7% surge in retail sales as homebound shoppers spent big on clothing, furniture and sports equipment. But the previous two months had yielded record-breaking declines, as Americans abruptly pulled back on discretionary spending. Retail sales fell 8.3% in March and 14.7% in April, which is a revised figure.
The sales data don’t capture all household purchases, so personal-spending figures that include outlays for all services will offer a fuller picture July 31.
The June retail sales stood in sharp contrast to weekly jobless claims data, which showed that 1.3 million Americans filed for unemployment benefits last week, the 17th week in a row in which claims exceeded 1 million. Although some Americans have gotten back to work as states have reopened, nearly 15 million who lost their jobs in March and April haven’t been rehired, which is as many people out of work as during the worst of the 2008-09 recession.
The economic data comes as Congress debates whether to extend extra federal jobless benefits, currently $600 a week, that have helped many struggling workers stay afloat. That program is set to expire at the end of the month.
Some backpedaling in states affected by a pickup in virus cases will inevitably spur another wave of layoffs as recently opened businesses must again close their doors.
Bars in Texas shuttered again at the end of last month as infections surged there. Pennsylvania this week ordered that restaurants can seat only 25% of their potential customers. Gap, Kohl’s
and other stores are withdrawing clothes worn in their changing rooms from sales floors for several days as a precautionary move.
Earlier this week, California ordered all inside dining and other indoor entertainment closed. Job openings across all 50 states have declined over the past two weeks, according to jobswebsite Glassdoor Inc.
“Retail purchases are up at the shops and malls across America. but consumer spending can’t keep climbing for long when it is held back by the heavy weight of 32 million jobless workers,” Chris Rupkey, chief financial economist with MUFG Union Bank, wrote in comments emailed to The Washington Post.
Retailers are still adjusting their business operations as states and localities puzzle out standards for reopening, including social distancing and mask requirements. On Wednesday, Walmart and Kroger announced they would require all shoppers to wear masks, joining other national chains such as Best Buy, Apple and Costco.