In spite of recent positive news out of the U.S. Bureau of Labor Statistics—non-farm payroll employment rose by 1.4 million and the unemployment rate fell by 8.4% in August—advance estimates of retail and food services for the month seem to suggest that Americans are spending cautiously as the threat of Covid-19 and major economic fallout still looms.
While the U.S. Census Bureau’s advance August 2020 sales report shows a year-over-year increase of 2.6% compared to August 2019, and a month-to-month increase of 0.6% from July 2020, sales were lower than the 0.9% month-to-month increase from June to July. However, total sales for the summer period of June to August 2020 were up 2.4% compared to the previous summer.
Though August marked the fourth consecutive month of growth, the numbers were “disappointing” and lower than the 1.1% increase analysts had expected, economists at Pantheon Macroeconomics told the Associated Press. As people lost their $600-a-week unemployment supplemental benefit (and may not qualify for the $300-a-week Lost Wages Assistance subsidy program), the economists noted that these numbers may be a hint that recovery remains complex and uncertain.
Retail trade sales in August went up by a slim margin (0.1%) from July, but they were 5.1% above last year. Non-store retailers (which includes online shopping) did not experience a statistically significant change in sales from July to August. But, compared to August 2019, non-store retail sales were up 22.4%, showcasing consumers’ preference for ecommerce over in-person shopping.
Industries that recovered from July to August include:
- Food services and drinking places (4.7%)
- Furniture and home furnishing retailers (2.1%)
- Building material and garden supply dealers (2.0%)
- Health and personal care stores (0.8%)
- Electronics and appliances (0.8%)
- Gasoline stations (0.4%)
- Motor vehicle and parts dealers (0.2%)
Industries that took hits include sporting goods, hobby, musical instrument and book stores (-5.7%), food and beverage stores (-1.2%), general merchandise stores (-0.4%) and miscellaneous retailers (-0.2%).
It should be noted that, while clothiers and fashion accessory stores may have made more money in August compared to July and June, sales were still down 20.4% year over year. Throughout the first eight months of 2020, overall sales for clothiers and fashion accessory stores have decreased by 34.9% compared to last year.
Covid-19’s effect on fashion retail has been observable in the number of bankruptcies filed and store locations permanently shuttered since lockdowns and social restrictions began in March. In the past six weeks alone, several clothing brands have faced public distress and financial difficulty, including J. Jill, Century 21, Lord & Taylor and Tailored Brands (parent of Men’s Wearhouse and Jos. A. Bank).
The Census Bureau’s September 2020 Advance Monthly Retail Report is scheduled for release on Oct. 16. Monthly estimates are adjusted for seasonal variation and holiday and trading day differences.