Retail sales are expected to have climbed for the fourth straight month in August, extending a bounce back that has lasted longer than many economists had expected.
The Commerce Department reports the monthly figure on Wednesday and is expected to show that Americans continued to spend on home computers, new cars and online groceries. .
The continued rise in consumer spending has occurred against a grim economic backdrop that grew even darker as the $600-a-week supplemental unemployment assistance expired and Congress failed to agree on new stimulus measures. Unemployment declined, but stayed high as huge sectors of the economy — like hospitality, food service and travel — remain largely shut down.
In the face of such broad economic turmoil, the level of spending has surprised some experts, even when factoring in Americans’ seemingly unwavering propensity to shop.
A few factors likely converged, including stock market gains that increased purchases among wealthy spenders and money that people in the lower-income bracket had been saving from their $600 weekly assistance, which ended July 31.
The recovery continued to be strong for some retailers, while others have struggled.
Most apparel chains and department stores have seen sales tumble during the pandemic. In the past six weeks, Lord Taylor and Century 21, a staple of bargain apparel shopping in New York, joined the growing list of retailers that have filed for bankruptcy in recent months. Both plan to liquidate.
Yet, national chains like Best Buy, Dick’s Sporting Goods and West Elm have reported revenue jumps this summer, with many Americans spending more on goods that they could use at home or while socially distancing outdoors. Dick’s reported a record quarter last month, fueled by outdoor activities like golf, camping and running.
“I would have expected more weakness,” said Scott Anderson, an economist at the Bank of the West. “I think there is a bit of deer-in-the-headlights phenomenon. People are having trouble wrapping their minds around the extent of the economic losses.”