Thanks in part by the back-to-school rush as well as loosening restrictions, total retail sales have started to rebound.
However, the rise of retail has not been equal as the Covid delta variant is curbing demand for services like leisure and travel may be having the effect of moving money towards goods.
Unexpectedly, retail sales in the US increased across most categories with some weaknesses still remaining.
The value of retail purchases climbed 0.7% in August after a fall of 1.8% in July – which was the largest gain in 5 months.
This was unexpected because judging from a survey of economists, they were expecting a range between a 3.3% drop and a 1.1% gain – an average of a 0.7% gain.
This surprise in sales can be underpinned partly due to back-to-school shopping and the demand for a broad range of goods.
The numbers also show strong performance in ecommerce for retailers.
Yet the persistent presence of the Covid delta variant has prevented the opening up of services such as travel at a faster rate. This has perhaps channeled people’s pockets towards goods.
In terms of service spending, receipts for bars and restaurants stagnated during August.
“While spending on goods was much stronger than we anticipated, that presumably will just add to the shortages seen in recent months,” said Michael Pearce, senior US economist at Capital Economics. “While the flatlining of spending in restaurants and bars suggest that the broader recovery in services consumption probably faltered.”
In recent weeks, rising Covid infections, hikes in prices, and frustrating supply chain challenges have hit third-quarter forecasts. Goldman Sachs, for example, downgraded their forecast for Q3 to a drop of 0.5%.
Of the 13 categories that the US Commerce Department tracked, 10 registered increases in sales.
There was a decrease in sales for electronics, car dealers, sporting goods, and hobby stores.