Woodkirk Stone
NEW YORK (AP) – Despite an increase in COVID-19 cases, Americans spent at a sustained rate last month, although much of that spending was made online and not in restaurants or other industries besieged by the arrival of the delta variant.
Seasonally adjusted retail sales rose 0.7% in August from the previous month, the US Department of Commerce said Thursday. This rise surprised economists looking for a slowdown. Consensus estimates were for a decrease of 0.85%, according to a FactSet poll.
But the delta variant has changed where Americans spend their time and money. Online sales soared 5.5% last month, while sales at restaurants and bars, many of whom believed they were going through the worst of the pandemic until the arrival of delta, were flat from the month previous.
Earlier this year, as millions of people were vaccinated, sales at restaurants, bars and other crowd-dependent businesses soared. But in July, health officials recommended that even vaccinated people wear masks in public places indoors due to the delta variant.
Vaccine reluctance in the United States is cited by economists after the Department of Labor reported this month that employers created just 235,000 jobs in August, well below the roughly one million jobs created in each of the preceding two months.
Back-to-school shopping may have given a boost to retail sales this month. Department store sales rose 2.4% last month, according to the Commerce Department, as children returned to class and, perhaps for the first time in over a year, purchased back-to-school clothes and other supplies.
The weekly jobs report only covers about a third of overall consumer spending and doesn’t include services like haircuts, hotel stays, and plane tickets, and it’s clear that spending has also declined in some of these industries. Airlines, for example, have reported a drop in bookings due to the spread of the delta variant.