With the weekly $600 UI benefits expiring during the summer, consumer spending took a hit in August as Retail Sales showed slower than expected growth. At the headline level, Retail Sales grew 0.6% compared to forecasts for growth of 1.0%. Ex Autos and Ex Autos and Gas, growth came in slightly better at 0.7% but still shy of forecasts. In addition to the weaker than expected August reading, July’s sales were also revised lower from 1.2% down to 0.9%. While Retail Sales still showed growth, the report was underwhelming on just about all fronts.
While the level of growth was weaker than forecast, breadth within this month’s report was once again positive as nine out of thirteen different sectors saw m/m gains. The big leader by far was Bars and Restaurants which grew 4.7%, followed by Clothing, Furniture, and Building Materials which all saw month-over-month gains of over 2%. On the downside, Sporting Goods and Food and Beverage Stores both saw sales contract over 1%. Based on these moves, we’re still seeing a continuation of the trend of Americans returning to their prior spending habits before the onset of COVID.
While the monthly pace of retail sales is back at all-time highs, the characteristics behind the total level of sales have changed markedly in the post COVID world. In our just-released B.I.G. Tips report, we looked at these changing dynamics to highlight the groups that have been the biggest winners and losers from the shifts. For anyone with more than a passing interest in how the COVID outbreak is impacting the economy, our monthly update on retail sales is a must-read. To see the report, sign up for a monthly Bespoke Premium membership now!