Retail Sales Bounce Back to Pre-Pandemic Highs
August 14, 2020
Retail sales have more than made up the ground lost during the pandemic and have reached a new high. July’s sales increased 1.2% from the month before, bringing the total for the month to $536 billion. Sales for the month were up 2.7% from the same month last year.
When adjusted for seasonal factors, sales in July were 1.7% higher than in February, the last month before widespread lockdowns were implemented. The strong recovery in the retail space gives some hope that the third quarter’s GDP will be strong, as consumer spending accounts for two-thirds of total GDP.
Some economists worry though that the rapid V-shaped recovery could be setting up a “W” instead, warning that retail spending is likely to stall in August. The primary cause for concern is the expiration of the weekly $600 unemployment benefit, which ended at the start of the month. With Congress deadlocked on another stimulus bill, the White House issued a special directive that will provide an additional $300 for those on unemployment, but those payments may take weeks to arrive.