Sales are up, but not as much as economists would like.
Since retail businesses began efforts to reopen in May and June, retail purchases, not including things like cars, gas, and building materials, have seen a small uptick. Retail purchases in July were initially estimated to have risen by about 1.4%, though that estimation has since been revised to 0.9%. Economists hoped that things would continue their upward trend in August, and while that does seem to be the case according to preliminary data, the sales haven’t quite hit the mark.
According to recently released data from the US Department of Commerce, retail sales fell short of the expected 1% rise in August, landing at only a .5% increase, though that increases to .6% if one were to count the sale of gasoline. Economists have theorized this slow in retail sales to be due to two major factors: increasing unemployment and decreasing income.
Currently, at least 29.6 million US citizens are on unemployment benefits to supplement their income, due to either lost jobs or reduced hours caused by the pandemic. When the $600 increase to benefits increased in July, everyone on unemployment lost a decent portion of their income. The $300 increase that is currently in effect has been received by far fewer citizens, due in part to states being unable to afford the increase without government help. The $300 increase is also set to expire some time this month.
The pressure is currently on the US government to introduce new stimulus legislation, talks for which have been stalled out for several weeks. If an agreement cannot be reached, there is a chance retail sales could fall further in the coming months.