Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Retail spending in the United States rose sharply in September

Retail spending in the United States rose sharply in September



Retail sales in the United States increased in September for the fifth month in a row as consumers prepared for the next months of work and home study by spending on vehicles, sporting goods and home furnishings.

Measurement of purchases in stores, restaurants and online retail sales increased by a seasonally adjusted 1.9% in September compared to the previous month, the Ministry of Trade announced on Friday, ahead of economists’ expectations of 0.7% growth.

“September is a kind of articulated month” between the seasons of going back to school and the holidays, said Craig Johnson, president of a client growth consulting firm. He added that this year’s return to school pushed even further in September because many schools delayed the opening of personal classes, which gave a second wind to sales of school supplies and computers.

Yet other data show that economic recovery is losing momentum. Total consumer spending remains below pre-epidemic levels as the cost of personal services such as dentist visits, travel and sporting events has not been fully recovered. The growth of monthly jobs has slowed in recent months. New applications for unemployment benefits, a proxy for redundancies, rose last week to their highest level since late August. And more workers say their layoffs are permanent.

Blerina Uruchi, an economist at Barclays, noted how high consumer spending on durable goods is.

“It̵

7;s a shift from services, which in many ways is forced because people have to be more careful because of [coronavirus] a pandemic, ”she said.

Retail sales returned to pre-epidemic levels in June and have risen every month since. The retail report does not track the costs of most services, such as healthcare and hospitality, which make up the lion’s share of US consumer spending. Unlike other economic reports prepared by the US government, retail sales are not adjusted for inflation.

Laura Harrison and her husband Drew bought a home in Nashville, Tennessee, in July because they wanted more space, including an office for Mrs. Harrison, who worked from home before the pandemic.

They face “a lot of expenses for which we were not prepared” related to the purchase of their house, such as furniture. “We had reached a place where we really were out of debt, and buying a house paid us back a little more than we had thought.”

Drew and Laura Harrison at the Nashville home they bought in July.


Photo:

Sarah Kamalvand

Ms. Harrison also saw creeping inflation, with spending on gasoline and food rising. Her food bill has increased by about $ 75 to $ 100 per shopping trip since before the pandemic, she said.

“It’s just all these little things, those everyday things that seem to have increased, even though the pay hasn’t gone up,” said Ms. Harrison, who works as a media planner for a television company.

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Sales in car dealerships account for about 20% of total retail sales, and motor vehicle costs rose sharply last month, rising by 3.6% per month.

This is partly due to the avoidance of public transport by consumers due to high levels of Covid-19 infection and rising vehicle prices, according to economists. The Department of Labor announced last week that while the consumer price index rose 0.2% in September, the used car and truck index jumped 6.7%. The prices of new cars increased by 0.3% compared to the previous month.

But real-time data from private companies show that total consumer spending, including the cost of personal services, is still lower than a year ago.

Credit and debit card data collected by Affinity Solutions and the research group Opportunity Insights show that total costs fell 2.3% at the end of September compared to January levels. Tracking of credit and debit card transactions of JPMorgan Chase & Co. showed that spending was down 5.8% from a year ago in the week ending October 10th.

Analysts and economists are paying close attention to monthly retail sales as a way to assess how the economy can recover from the effects of the coronavirus pandemic. Photo: Kathy Willens / Associated Press. (Originally published on June 16, 2020)

Write to Harriet Tory at harriet.torry@wsj.com

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