August Retail Sales Rebound 0.7%, Surprising Economists After July Plunge

Kimberly Redmond  |

Video source: YouTube, CNBC Television

Americans opened their wallets and spent last month, giving retail sales an unexpected rebound after plunging the month before, the US Commerce Department reported Thursday. 

The continued surge in COVID-19 cases nationwide, however, has changed where Americans are spending their money.

August’s seasonally adjusted increase of 0.7% was primarily driven by online sales, which saw a whopping 5.3% jump from July, home furniture and furnishings, which rose 3.7%, and department store sales, which went up 2.4%.

The overall boost, Reuters noted, was likely the result of back-to-school shopping and child tax credit payments from the federal government. 

Sales at restaurants and bars, many of which believed they were through the worst of the pandemic until the arrival of delta variant, were flat from July.

Automobile sales at dealerships fell 3.6% last month, as fewer cars rolled off the assembly lines due to the ongoing global chip shortage and pandemic-related production shutdowns. The decline follows a 4.6% fall in July.

Excluding auto sales, US retail sales surged by 1.8% in August after tumbling by a revised 1.0% in July, according to the data. 

The uptick was a surprise to most economists, who had predicted a decrease of 0.85%, according to The Associated Press

Meanwhile, a separate report from the US Labor Department showed first-time claims for unemployment benefits rose by 20,000 to 332,000 for the week ending Sept. 11.

The higher-than-expected rise came a week after claims had hit their lowest level since March 2020. The continued surge in new COVID-19 cases, combined with the aftermath of Hurricane Ida in Louisiana, Mississippi, New York and New Jersey, may have slightly increased layoffs, Reuters noted.  

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Source: Equities News

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