U.S. retail sales rise less than expected in July
U.S. retail sales in July increased less than expected and could slow further in the months because of spiraling new COVID-19 infections and a reduction in unemployment benefit checks, Trend reports with reference to Reuters.
Retail sales rose 1.2% last month after advancing 8.4% in June, the Commerce Department said on Friday. Economists polled by Reuters had forecast retail sales rising 1.9% in July. The strong retail sales are now mostly history.
Coronavirus infections continue to spread across the United States, forcing authorities in some of the hot-spots to either shut down businesses again or pause reopenings. The respiratory illness has left consumers wary of visiting places like restaurants and shopping malls, cutting into spending.
Tens of millions of unemployed people lost a $600 weekly jobless benefits supplement at the end of July, which had accounted for 20% of personal income, helping with the buying of food and paying of bills. President Donald Trump on Saturday signed a bunch of executive orders, including extending the supplement, though he reduced the weekly payout to $400.
But states, who are required to cover $100 of the benefits under the order, are themselves under immense financial pressure caused by the pandemic. The remaining $300 will be funded from a limited emergency disaster relief program, which economists estimated could be depleted as early as September.
Economists saw little boost to spending from the other executive orders suspending the collection of payroll taxes for a group of workers, stopping evictions from rental housing that has federal financial backing and extending zero percent interest on federally financed student loans.
Republicans and Democrats are bickering over new aid for the economy even as signs mount that activity is stalling.
Job growth slowed significantly in July and at least 31.3 million people are on unemployment benefits. The economy, which entered recession in February, suffered its biggest blow since the Great Depression in the second quarter, with gross domestic product dropping at its steepest pace in at least 73 years.
About 28.3 million are on unemployment benefits.