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US retail sales in October 2020

A woman carries shopping bags from Macy’s department store in downtown Manhattan after the outbreak of coronavirus disease (COVID-19) in New York City on July 9, 2020.

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Retail sales in the United States increased less than expected in October and could slow further, restrained by a spiral of new Covid-1

9 infections and declining household incomes as millions of unemployed Americans lose government financial support.

Retail sales rose 0.3% last month, the sales department said on Tuesday. September data was revised to show sales growth of 1.6%, instead of increasing by 1.9%, as previously reported. Economists polled by Reuters predicted that retail sales would gain 0.5% in October.

Excluding cars, petrol, building materials and food services, retail sales rose 0.1% after a downward revision of 0.9% in September. These so-called basic retail sales correspond most closely to the consumer cost component of gross domestic product. Earlier, they were expected to grow 1.4% in September.

Daily cases of new coronaviruses have topped 100,000 since the beginning of this month, pushing the number of infections in the United States to more than 11 million, according to Reuters. Some state and local governments have imposed new restrictions on business.

Restrictions and consumer avoidance in crowded places, such as bars and restaurants, could undermine costs and trigger a new wave of layoffs, further shrinking incomes after losing a state unemployment subsidy.

The supplement, which was part of more than $ 3 trillion to alleviate the government’s coronavirus, has expired for millions of unemployed and underage workers. Millions more will lose benefits next month when a government-funded program for the self-employed, giants and others who do not qualify for regular state unemployment programs expires.

Another government program providing benefits to people who have exhausted their six-month state aid entitlement will also expire in late December.

A second bailout is unlikely before President-elect Joe Biden takes office in January.

Economists expect moderate growth in retail sales for the rest of the year, which will contribute to slower economic growth after a historic jump in gross domestic product in the third quarter. A survey by JPMorgan among credit and debit cardholders showed a broad decline in costs until November 9, with large declines in countries where Covid-19 is spreading the fastest.

Growth estimates for the fourth quarter are below 5% per year. The economy grew 33.1 percent in the July-September quarter, following a 31.4 percent contraction in the second quarter, the deepest since the government began reporting in 1947.

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