The U.S. economy improved in August, but month-over-month gains continue to lose pace following a record gain in May. According to the Census Bureau’s advance monthly report on retail and food services sales, total sales rose by 0.6% month over month, below the revised estimate of a 0.9% increase between June and July.
Consensus estimates from Econoday called for a month-over-month increase of 1.0% and an increase of 1.0% excluding automobiles, parts and gasoline. The advance estimate excluding autos, parts and gasoline came in with a gain of 0.7%.
Non-store retailers (i.e., e-commerce) posted a 19.6% year-over-year gain in sales for the first eight months of 2020, compared to the same period last year. Interestingly, however, digital sales slipped slightly month over month from $81.7 billion in July to $78.3 billion in August. The decline is consistent with the trend reported earlier this week by Adobe Analytics.
Compared with August of 2019, last month’s e-commerce sales were 22.4% higher, less than the 23.4% difference between July 2019 and July 2020. As retail stores reopen, consumers are returning, even if only in modest numbers.
The U.S. economic rebound began in May with a month-over-month gain of a record 18.2%. That declined to 8.4% between May and June and 0.9% in between June and July. The economy is still growing, but increasingly slowly.
The largest year-over-year declines occurred in clothing and accessories sales, down 20.4% and restaurant/bar sales and gasoline sales, both down by 15.4% although all posted higher month-over-month sales in August.
Excluding automobile, auto parts and gasoline sales, total retail sales in August rose by 4.0% year over year, up from a 3.5% increase year over year in July.
Auto sales increased by 0.2% month over month in August, after falling by 1.0% in July. Year over year, auto sales rose by 4.5% in August, compared to an annual increase of 6.3% in July.
Department store sales have dropped by 18.9% year over year for the first eight months of 2020. Compared to August 2019 totals, department store sales fell by 16.9% last month. Month over month, sales dipped by 2.3%.
Sales at building materials and home/garden stores are up 11.4% for the first eight months of the year and were 15.4% higher year over year in August.
Electronics and appliance stores posted a month over month gain of 0.8% but a 2.5% decline year over year for the month. For the first eight months of the year, sales are down 16.8% compared with the first eight months of last year.
A bright spot for the economy was sales at electronics and appliance stores. July sales rose 22.9% compared to June, and June sales were up 37.4% over May. Year over year, electronics and appliance sales were down just 2.8% in July, compared to a year-over-year decline of 12.7% in June.
Unemployment remains high at around 14 million, and there is no sign of a congressional agreement on whether or how much to offer expanded benefits. Without consumers who have money to spend, sales growth is unlikely to return.