Retail Sales Rise, Jobless Claims Edge Higher
Retail Sales Rise, Jobless Claims Edge Higher
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Retail Sales Rise
U.S. retail and food service sales in August rose 0.6% from the prior month, and topped the year-earlier figure by 2.5%, as consumers remained resilient despite economic uncertainties.
Thursday’s Commerce Department data showed spending at stores and restaurants totaled about $697.6 billion. A recent spike in gasoline prices was a big contributor to the monthly increase in spending, though gas station expenditures were down 10.3% from a year earlier. Food and drinking establishments kept up a healthy pace of recent spending, rising 8.5% from August 2022.
Analysts said the August numbers beat expectations, though there are challenges ahead.
“Consumption growth is still on track for a strong gain in Q3 overall, but with job and wage growth slowing, student loan repayments restarting, and borrowing conditions still tightening, the headwinds to consumer spending are mounting,” Oxford Economics US lead economist Michael Pearce said in a statement.
Neil Saunders, Managing Director of research firm GlobalData, said this year’s holiday season spending could still prove conservative despite August’s modest improvements in several spending categories. He said apparel retailers were among those boosted by back-to-school shoppers during August, while demand declined for big-ticket items like furniture and appliances.
“In the general scheme of things, this isn’t a bad uplift, but it underlines the fact that the sector is on a much shallower trajectory than it has been for the past few years,” Saunders said in a statement. “Once inflation is taken into account, overall retail volumes declined by around 0.3%.”
Initial claims for unemployment insurance totaled 220,000 for the week ended Sept. 9, up by 3,000 from the prior week’s revised level in a strong jobs climate.
The Labor Department said the four-week moving average for claims was 224,500, a decline of 5,000 from the prior week’s average.
The total number of continued weeks’ clams in all programs, tracked on a more delayed basis, was about 1.8 million for the week ending Aug. 26, a decrease of 42,569 from the previous week. There were about 1.4 million continuing claims in the comparable week of 2022.
The U.S. unemployment rate remained near a 50-year low at 3.8% in August. Still, U.S. companies announced more than 550,000 layoffs in the first eight months of 2023, up 210% from a year earlier, according to outplacement firm Challenger, Gray & Christmas.