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U.S. retail sales rebound in August after declining due to Delta variant surge
The Xinhua news agency reported, the US Commerce Department stated Thursday that U.S. retail sales rebounded in August after declining in the previous month amid a Delta variant-driven COVID-19 surge.
According to the Xinhua, retail sales totaled 618.7 billion U.S. dollars in August, up 0.7 percent from the previous month, according to the report. In July, retail sales fell by downwardly revised 1.8 percent, as consumer concerns grew amid surging COVID-19 cases.
Retail sales had dropped in May after surging in the prior two months.
"Retail sales came in better than expected for August but followed large downward revisions to July," Diane Swonk, chief economist at major accounting firm Grant Thornton, wrote in a blog Thursday.
She wrote: "Vehicle sales fell on widespread shortages and price markups. Chip shortages idled production again in September, while flood damages from Hurricane Ida boosted demand."
Swonk also noted that inventories are "so tight" that some smaller dealers are unsure whether they will be able to cover overhead costs and "could go under" if inventories cannot be replenished soon.
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According to the official data, total sales for the June-August period were up 16.3 percent from the same period a year ago, indicating economic recovery from pandemic recession.
The recovery, however, has been dented by the recent Delta surge, leading to a decline in consumer confidence and a hiring slowdown.
The U.S. economy "has cooled significantly" as a result of the rapidly spreading Delta variant, the diminishing fiscal impulse and lingering supply constraints, according to Gregory Daco, chief U.S. economist at Oxford Economics.
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Looking forward, Swonk said data on the worst effects tied to the spread of the Delta variant and disruptions from Hurricane Ida is "still ahead of us."
Noting that this is at the same time that the additional support to unemployment insurance for millions has expired, Swonk said "we are poised to eke out a very modest gain for consumer spending during the quarter."
Source: xinhua
