Retail sales post surprise gain as consumers show strength amid delta fears

Retail sales posted a surprise gain in August despite fears that escalating Covid cases and supply chain issues were holding back consumers, the Census Bureau reported Thursday.

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

A separate economic report showed weekly jobless claims jumped to 332,000 for the week ended Sept. 11, according to the Labor Department. The Dow Jones estimate was 320,000.

Economists expected consumers to scale back as the delta variant continued its tear across the United States. Persistent supply chain bottlenecks are also expected to dampen spending as products in demand were hard to find.

However, sales were strong in most regions during the month, when back-to-school purchases typically lead to an upturn in activity, especially this year as schools prepared to welcome students again after. one year of distance learning.

The overall figure would have been even better without a 3.6% monthly drop in automotive activity; Excluding the sector, sales rose 1.8%, also well above the expected gain of 0.1%.

With fears of the pandemic mounting, shoppers have turned online, with out-of-store sales surging 5.3%. Furniture and furnishings also saw a strong increase of 3.7%, while sales of general merchandise rose 3.5%.

Electronics and appliance stores were down 3.1%, while sporting goods and music stores fell 2.7%.

Overall, the numbers reflect a more resilient consumer, with sales up 15.1% from the same period a year ago.

The bullish surprise in retail was tempered slightly by a disappointing reading of jobless claims.

Initial deposits are up 20,000 from a week ago after posting a new pandemic-era low. Still, the four-week moving average, which takes into account weekly volatility, fell to 335,750, a drop from 4,250 that took the figure to its lowest point since March 14, 2020, at the start of the pandemic. .

Continuing claims have also declined, dropping from 187,000 to 2.66 million, also a new low since Covid struck. The four-week moving average has fallen to around 2.81 million.

However, the number of people receiving benefits under all programs actually increased just before the expiration of enhanced federal unemployment benefits. This total, although on August 28 and therefore before expiration, increased from 178,937 to 12.1 million.

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