Sales at retailers and restaurants were up 0.7%, a sign of economic resilience despite the Delta variant
WASHINGTON – U.S. retail sales increased a modest 0.7% in August, as consumers spent more on apparel, electronics and home goods, the Commerce Department reported today.
The larger-than-expected increase followed a 1.8% decline in July and gains earlier this summer. The recovery’s uneven pace is highlighted by declining sales at restaurants and bars last month after notable gains earlier in the summer, when consumers exhibited pent-up demand for in-person shopping and dining experiences and for places to safely gather to socialize and engage with brands.
Economists had expected a pull-back in consumer spending in August on concerns about the Delta variant and as persistent supply-chain disruptions made some merchandise hard to find.
Separately, the Labor Department reported this week that prices of consumer goods continued to climb in August, albeit at a slower pace.
The latest retail sales figures show that rising fears about the pandemic prompted more online shopping in August, when non-store sales increased 5.3%. Other highlighters include a 3.7% increase in spending on furniture and home furnishings, as well as a 3.5% increase in sales of general merchandise.
“Retail sales in August overcame unusual twists and turns that have affected shopping behavior, both in terms of the timing and composition of sales,” according to Jack Kleinhenz, chief economist at the National Retail Federation. “The consumer remains rock solid despite the trifecta of macroeconomic headwinds we’ve seen this year.”
The August sales figures set the stage for sustained consumer spending and a solid economic recovery in the fourth quarter, Kleinhenz said.
A holiday spending forecast released this month by Mastercard SpendingPulse projects U.S. retail sales will hit an all-time high this holiday season, with spending heavily influenced by pent-up household savings and government stimulus. The forecast anticipates sales rising 7.4% from last year and 11.1% from 2019, the last holiday season unaffected by the pandemic.