Economists think retail sales rose for the third straight month after growing briskly in May and June. But they are expecting a more modest gain this time.
By Josh Mitchell Close Josh Mitchell and Suzanne Kapner Close Suzanne Kapner Aug. 14, 2020 5:30 am ET U.S. households appear to be tightening their spending on retail goods and services, sapping momentum from the budding economic recovery.
On top of that, a rise in coronavirus infections in several big states earlier this summer prompted a new round of restrictions on businesses and spooked many consumers back into their homes. The prospect of schools moving teaching online this fall may also undermine back-to-school spending. Expectations of a third-quarter rebound in U.S. gross domestic product hinge largely on Americans’ willingness and ability to shop.“Many households are now being more cautious now that enhanced unemployment benefits have dried up,” said Neil Saunders, a retail analyst for the research firm GlobalData.
Shawn Hall spent her $1,200 stimulus check as soon as she received it in April on bills and rent. Since the pandemic started, the 48-year-old Charlotte, N.C., resident has been earning less as a self-employed education consultant, and she is hoping Congress passes another round of stimulus spending to help her make ends meet. Meanwhile, she has cut back on dining out and Starbucks lattes, opting to make coffee at home.
Consumer spending has held up. One big factor is that aggregate household income has actually grown since the pandemic began in March, boosted by federal stimulus checks of up to $1,200 for individuals and the enhanced unemployment benefit.
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