S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12
S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12
S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12
S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12

Surprise uptick in spending by Americans as delta spread

Thursday, September 16, 2021 | Joseph Pisani, AP Retail Writer


In this July 21, 2021 photo, a consumer shops as she wears a mask at a retail store in Morton Grove, Ill. Americans kept shopping last month, despite a rise in COVID-19 cases. Retail sales rose a seasonal adjusted 0.7% in August from the month before, the U.S. Commerce Department said Thursday, Sept. 16. (AP Photo/Nam Y. Huh)

NEW YORK (AP) — Americans continued to spend at a brisk pace last month in the face of rising COVID-19 infections, though much of it was done online and not at restaurants or other sectors in the U.S. economy beleaguered by the arrival of the delta variant.

Retail sales rose a seasonally adjusted 0.7% in August from the month before, the U.S. Commerce Department said Thursday. That uptick caught most economists by surprise. Consensus estimates were for a decrease of 0.85%, according to a survey of economists by FactSet.

Online sales soared 5.3% last month, while sales at restaurants and bars, many of which believed they were through the worst of the pandemic until the arrival of delta, were flat from the month before.

Earlier this year as millions were vaccinated, restaurants, bars and other venues that rely on crowds began to bustle for the first time since early 2020. Then, in July, U.S. health officials recommended that even vaccinated people should wear masks when indoor in public due to the unchecked spread of delta, particularly in regions of the country with lower vaccinations rates.

Vaccine hesitancy in the U.S. is being cited by economists after the Labor Department reported this month that employers added just 235,000 jobs in August, far short of the million or so jobs added in each of the previous two months.

Back-to-school shopping may have given retail sales a boost. Sales at department stores rose 2.4% last month, according to the Commerce Department, as children headed back to the classroom and perhaps for the first time in more than a year, bought new clothing and other supplies.

The retail report released Thursday covers only about a third of overall consumer spending and doesn’t include services such as haircuts, hotel stays and plane tickets. There is clear evidence that spending has waned in some of those industries. Airlines, for example, recently reported a drop-off in ticket sales and they blame the spread of the delta variant.

Auto sales continued to fall last month, likely because fewer cars were made due to a pandemic-related shortage of chips, which are needed to power screens and other tech features in cars. Sales at auto dealerships sunk 3.9% last month, the Commerce Department said.

Some economists still hope for a larger bump in consumer activity this year. The four-week average of jobless claims, which smooths out fluctuations in the weekly data, dropped for the fifth straight week, the Labor Department said Thursday. That's the lowest since the pandemic began.

More people are finding jobs and many of those who have remained in their jobs have saved cash during the pandemic and will have more to spend, said Sal Guatieri, a senior economist at BMO Capital Markets.

“The surprising upturn in August retail sales supports this positive message," Guatieri wrote.

However, much depends on whether the U.S. can contain the spread of the virus.

The Labor Department also reported Thursday that the number of Americans seeking unemployment benefits ticked higher from a pandemic low last week, a sign that the spread of the delta variant may have slightly increased layoffs.

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This story has been corrected to say online sales rose 5.3%, not 5.5%.

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Follow Joseph Pisani on Twitter: @ josephpisani


7 Stocks to Buy Now and Avoid a Summer Swoon

Summer is generally a quiet time in the markets. Institutional investors, generally speaking, take some time away. In fact, that’s where the idiom “Sell in May and Go Away” comes from.

But quiet doesn’t mean uneventful. The world still moves along even in the lazy months of summer. And at the moment, there are two conflicting views driving the market.

One is the fear that everything’s a bubble that is just about to burst. We don’t recommend you get out of stocks, but let’s face it, things are more than just a little frothy.

But there’s another view summarized by the acronym, YOLO (as in You Only Live Once). And these investors are committed to keeping the markets going higher. Even if it means going “all in” (whatever that means to them) on risky asset classes like NFTs or Dogecoin.

We sincerely hope you take time to recharge (whatever that means to you) this summer. Whatever your personal beliefs, the reopening of our economy is a moment that deserves to be celebrated by all of us. But before you do, we recommend that you take a peek at these seven stocks that you can consider adding to your portfolio before you check out for the summer. These are likely to get as hot as a firecracker on the Fourth of July and should have you smiling when the summer ends.

View the "7 Stocks to Buy Now and Avoid a Summer Swoon".


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