Retail sales rose for the second straight month as shoppers trickled back into stores.
Retail sales rose 7.5% in June from the prior month. Sales were expected to rise 5% after rising by 17.7% the prior month, according to consensus estimates from economists surveyed by Refinitiv.
However, retail analysts have cautioned that the recovery may be short-lived if US consumers become less willing to spend on discretionary items like clothing, especially as jobless claims rise.
Foot traffic to North American retail stores decreased by 43% during the week ending Wednesday, according to data from Bernstein.
“The pace of recovery has slowed in recent weeks,” Bernstein analysts said in a research note Wednesday. “As cases spike in some states and local governments roll back reopening plans, we will watch to see if traffic begins to reverse course in the coming weeks.”
Additionally, the federal government’s stimulus package and enhanced unemployment benefits of an additional $600 a week have boosted retail sales, economists say. The enhanced benefits are scheduled to end at the end of the month.
The “phase out of the Federal unemployment benefit boost of $600 [a week] looms large,” especially in light of slowing consumer trends in the face of infection resurgence, Jefferies analyst said in a research note this week.