The numbers: Sales at retail stores across the country rose in August for the third month in a row and topped precrisis levels, a remarkable turnaround for an industry hurt badly in the early stages of the coronavonirus outbreak whose rebound reflects the resiliency of the U.S. economy.
Retail sales increased 0.6% last month, the government said Thursday. Economists polled by MarketWatch had forecast a 0.7% increase.
The pace of sales has slowed, however, from earlier in the summer, when the economy reopened and many retailers experienced a sharp rebound in customer traffic.
Sales gains are likely to be harder to come by in the upcoming months, especially after the end of generous federal aid for the unemployed and businesses struggling to survive.
Retail sales are a big part of consumer spending and typically increase when the economy improves and Americans feel more confident to spend.
Sales have increased for three straight months and exceeded year-ago levels for the second month in a row. Few economists would have predicted such a rapid rebound in April or May.
What happened: Sales rose 0.2% auto dealers, which account for about one-fifth of all retail spending.
Gas station receipts also increased 0.4%, largely reflecting an increase in the cost of gasoline. Yet it still costs a lot less to fill up this summer than it did last summer because of weaker demand for oil and gas. People aren’t driving as much because of ongoing economic restrictions and tens of millions of people working from home.
If autos and gas are excluded, retail sales rose a slightly higher 0.7%.
Sales rose 4.7% at bars and restaurants as people went out to eat more or ordered more takeout.
Sales rose more modestly at home centers, pharmacies, electronic and appliance stores and clothing outlets.
Internet retailers saw basically no change in sales levels, though receipts are up 22% from a year earlier. Online sales have soared during the pandemic with most people working at home and limiting their trips out of the house.
Sales fell last month at department stores and groceries.
Big picture: Retail sales are about 2% higher now compared to pre-pandemic levels in February, but they would almost certainly be higher still had there been no viral outbreak.
While some retail segments have performed surprisingly well, many still have a long way to go. Sales at restaurants are down 21% from a year earlier, for example, and receipts at clothing stores are off 35%. These businesses simply can’t get back to normal until the coronavirus fades.
The end of federal benefits, meanwhile, could make it harder for retailers to keep up the momentum. The massive infusion of federal aid gave a boost to consumer spending after the economy reopened. Now it’s gone.