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U.S. retail sales miss expectations in July, may slow further in months ahead
Aug 14, 2020
WASHINGTON (Reuters) - U.S. retail sales in July increased less than expected as consumers cut back on purchases of motor vehicles and could slow further in the months ahead amid spiraling new COVID-19 infections and a reduction in unemployment benefit checks.
The report from the Commerce Department on Friday, however, did not change expectations that consumer spending will rebound this quarter after a record collapse in the second quarter.
Retail sales rose 1.2% last month after advancing 8.4% in June. Economists polled by Reuters had forecast retail sales would rise 1.9% in July.
Retail sales have been rebounding as businesses resumed operations after being shuttered in mid-March in an effort to slow the spread of the respiratory illness. Coronavirus infections continue to spread across the United States, forcing authorities in some of the hot-spots to either shut down businesses again or pause reopenings.
The respiratory illness caused by the virus has left consumers wary of visiting places like restaurants and shopping malls, cutting into spending.
The slowdown in retail sales in July was led by a 1.2% decline in receipts at auto dealerships. That followed a 6.1% acceleration in June. Consumers also cut back spending at hobby, musical instrument and book stores as well as at building materials outlets. But they boosted purchases at electronics and appliance stores, which soared 22.9%, likely reflecting strong demand as many Americans work from home.
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