Retail sales show surprising gains, as consumers show strength despite delta fears

Retail sales saw a surprise rise in August, despite fears that escalating Covid cases and supply chain problems would dampen consumers, the Census Bureau reported on Thursday.

Sales rose 0.7% during the month compared to the Dow Jones estimate of a 0.8% decline.

A separate economic report showed weekly unemployment claims rose to 332,000 for the week ended Sept. 11, according to the Department of Labor. The Dow Jones estimate was 320,000.

Economists had expected consumers to cut back on activity as the delta variant continued to break through the persistent U.S. supply chain.

However, sales were strong in most areas during the month, when back-to-school purchases generally result in a recovery in activity, especially this year, as schools prepared to host students after a year of remote learning.

The title number would have been even better without a 3.6% monthly drop in car-related activity; excluding the sector, sales increased by 1.8%, also well above the 0.1% expected profit.

With fears rising over the pandemic, shoppers went online and in-store sales rose 5.3%. Furniture and home furnishings also experienced a good 3.7% increase, while merchandise sales overall increased 3.5%.

Electronics and home appliance stores fell 3.1%, while sporting goods and music stores fell 2.7%.

In general, the figures reflect a more resilient consumer, with sales 15.1% more than the same period last year.

The positive retail surprise tempered slightly with a disappointing reading on unemployment claims.

Initial requests rose 20,000 a week ago after a new pandemic-era low was released. However, the four-week moving average, which represents weekly volatility, fell to 335,750, a drop of 4,250 that brought the figure to its lowest point since March 14, 2020, at the start of the pandemic. .

Ongoing demands also declined, falling by 187,000 to 2.66 million, also a new low since Covid hit. The four-week moving average dropped to 2.81 million.

However, those receiving compensation under all programs actually increased just before the expiration of the enhanced federal unemployment benefits. This total, although on August 28 and therefore before the expiration, increased by 178,937, to 12.1 million.

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