In August, consumer spending rose 0.6 percent, the fourth consecutive month of increases, but August’s pace of spending was slower than the 0.9-percent increase in July.
Still, retail sales were 2.6 percent above those in August 2019.
Spending on electronics was up 0.8 percent, clothing sales gained 2.9 percent, and furniture 2.1 percent. Spending at bars and restaurants jumped 4.7 percent as parts of the country returned to indoor dining.
Online retail sales were flat and spending at grocery stores slid 1.6 percent, although they still were 10 percent higher than in August of last year. Department stores’ take was down 16.9 percent and clothing store sales off 20 percent year on year.
Vehicle sales, which typically account for about 20 percent of retail dollar volume, edged up 0.2 percent for the month and outpaced sales a year earlier.
Also in August, employers added jobs and manufacturing output rose.
In part, the slower pace of spending is likely due to the end of some federal financial aid. That aid’s absence probably will continue to slow spending in the months ahead, analysts say, unless Congress can pass another round of stimulus spending.
Industry also increased production in August for a fourth consecutive month but gained just 0.4 percent following a 3.5-percent surge in June.
Analysts had expected a 1-percent gain in August.
Factories achieved the 1-percent rise in production but output from mines and utilities lagged.
The industrial sector’s output remains 7.3 percent below February’s amounts, the last full month before the economic shutdown began.
The U.S. industrial outlook remains uncertain as consumers and business hesitate to spend now that they have replenished items depleted during the shutdown, federal support payments have ended, and no COVID vaccine is yet available, analysts say.
TREND FORECAST: The slowdown in spending is a result of those federal supports disappearing, and retail sales will go down faster and harder unless Washington pumps more money into the people’s pockets.
