Retail sales July 2021 – .

Retail sales July 2021 – .

Buyers in the United States reduced their purchases in July even more than expected, as concerns over the delta variant of Covid-19 dampened activity and government stimulus packages dried up.
Retail sales for the month fell 1.1%, worse than the Dow Jones estimate of a 0.3% drop and less than the 0.7% increase in June.

Excluding automobiles, sales fell 0.4%, according to Commerce Department figures released Tuesday.

Markets showed little initial reaction to the news, with futures contracts linked to the Dow Jones Industrial Average above 200 points and government bond yields falling overall.

Consumers make up nearly 70% of all activity in the United States, so retail sales are closely watched as an indicator of overall economic health.

Fueled by a series of government stimulus checks, buyers have helped the economy emerge from the shortest recession in history, which only lasted two months from initial fears of the coronavirus in February 2020 until in April, a month after fiscal and monetary authorities launched an unprecedented series of programs to help the nation weather the pandemic.

Although July saw a month-over-month decline, the $ 617.7 billion in sales was still a 15.8% acceleration from the same period a year ago.

Most of the monthly decline was attributable to motor vehicle and parts dealers, which fell 3.9%. The auto sector has been a major contributor to the spike in inflation in 2021, with used car prices skyrocketing amid rising demand.

Clothing stores were down 2.6%, and sporting goods, musical instrument and book stores fell 1.9%. Online sales are also down 3.1%.

With energy prices continuing to rise, gasoline sales rose 2.4% and the return of businesses to bars and restaurants pushed food and beverage sales up 1.7% . Food service establishments saw their sales increase by 38.4% compared to a year ago.

Federal Reserve policymakers are watching economic data more closely, especially numbers related to consumer behavior.

While central bank officials widely admit that inflation has fulfilled their 2% mandate, they still perceive the need for an improvement in the labor market before a substantial policy tightening is likely. The Fed is expected to announce in the coming months that it will begin to slow the pace of its monthly bond purchases, but is not expected to start raising interest rates until late 2022 or early 2023.

The job market is making significant progress, with the non-farm workforce up by nearly a million in July and the unemployment rate down to 5.4%. There were more than 10 million job openings in June, about 1.3 million more than the overall unemployed labor force.

However, policymakers fear that unless Covid cases start to decline, the fall could lead to a slowdown in economic activity. Several Fed officials say if the jobs numbers continue to improve over the next two months, they will want to start cutting monthly bond purchases before the end of the year.

This is last minute news. Please check for updates.

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