US Retail Sales October 2020

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Retail sales in the United States grew less than expected in October and could slow further, held back by skyrocketing new Covid-19 infections and falling household incomes as millions of unemployed Americans lose government financial support.Retail sales rose 0.3% last month, the Commerce Department said on Tuesday. Data for September has been revised down to show sales jumped 1.6% instead of rising 1.9% as previously reported. Economists polled by Reuters had forecast retail sales to rise 0.5% in October.

Excluding autos, gasoline, building materials and food services, retail sales increased 0.1% after rising 0.9% revised downward in September. These so-called basic retail sales correspond most closely to the consumer expenditure component of gross domestic product. Previous estimates put them up 1.4% in September.

Daily new cases of the coronavirus have surpassed 100,000 since the start of the month, pushing the number of infections in the United States to more than 11 million, according to a Reuters tally. Some states and local governments have placed new restrictions on businesses.

The restrictions and the fact that consumers are avoiding crowded places like bars and restaurants could cut spending and trigger another wave of layoffs, further reducing incomes following the loss of a weekly government unemployment subsidy.

The supplement, which was part of more than $ 3 trillion in government coronavirus relief, has lapsed for millions of unemployed and underemployed workers. Millions more will lose benefits next month when a government-funded program for the self-employed, on-demand workers and others who do not qualify for regular state unemployment programs expires.

Another government program providing benefits for people who have exhausted their six months of state aid eligibility will also expire at the end of December.

A second bailout is unlikely before President-elect Joe Biden takes office in January.

Economists expect moderate growth in retail sales for the remainder of the year, which will contribute to slower economic growth after a historic rebound in gross domestic product in the third quarter. A JPMorgan survey of credit and debit card holders showed a large drop in spending through November 9, with sharp declines in states where Covid-19 is spreading the fastest.

Growth estimates for the fourth quarter are lower than an annualized rate of 5%. The economy grew at a rate of 33.1% in the July-September quarter, after contracting at a rate of 31.4% in the second quarter, the strongest since the government began to hold registers in 1947.

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