Americans kept shopping in July with retail sales rising 1.2 percent from June, reflecting a rare bright spot in the battered economy.
The jump in sales reported on Friday by the Commerce Department, though smaller than the increases in the previous two months, showed that the bounce back in spending to pre-pandemic levels was not a fluke. Sales are now back at the level they were in February. It was instead a sign that consumerism, buoyed by government support, remains resilient even as many other facets of American life are increasingly bleak.
“It shows there is a willingness and a desire to spend,” said Michelle Meyer, chief U.S. economist at Bank of America. “There is no doubt the recovery in consumer spending has been robust.”
Retail sales in June rose 8.4 percent. That followed a May jump, 18.2 percent, which was the largest monthly surge on record. But that had followed two months of record declines.
The number of new applications for unemployment benefits last week was 963,000, the Labor Department reported Thursday, as jobless claims for the first time dropped below a million after 20 consecutive weeks of being above that figure.
Economists had projected that claims would total 1.1 million.
The total number of people claiming jobless benefits in all programs for the week ending July 25 was 28.3 million, a decrease of over 3 million from the previous week. For comparison, there were 1.7 million people claiming benefits for all programs in the same week in 2019.
After jobless claims skyrocketed in March, with 6.9 million filing for benefits for the week ending March 28, the number of workers claiming unemployment benefits dropped precipitously through the end of May but had yet to fall below a million until this week.
The cost of many goods and services such as gas, autos, clothing and airfare rose in July and rebounded from pandemic lows, but inflation is still barely visible in the wake of a coronavirus-induced recession that sapped demand throughout the economy.
The consumer price index rose 0.6% for the second month in a row, the government said Wednesday. Economists polled by MarketWatch had forecast a 0.3% advance.
The cost of living had declined from March through May during the height of the crisis.
The increase in consumer prices over the past 12 months, meanwhile, rose to 1% from 0.6% in June.
Just seven months ago, at the start of 2020, the yearly pace of inflation has climbed to as high as 2.5%.
Small business confidence ticked up in the third quarter of the year, to 53 from a record low of 49 in Q2, according to the CNBC|SurveyMonkey Small Business Survey. Even with the rebound, the confidence reading is the second-lowest score in the survey’s history and eight points off where confidence stood to start the year.
Just 36% of businesses say that current operating conditions are “good” in this quarter’s survey, which is a major improvement from last quarter’s 18%. But nearly one-fourth say conditions are bad — three times the number who said conditions were poor to kick off the year.
The survey was conducted from July 20-27 among more than 2,000 small business owners nationwide.
“I think that small business owners see that economics are opening and we are not going to be moving backwards,” said Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, a Main Street advocacy group. “They see a light at the end of the tunnel.”
President Donald Trump signed several executive orders Saturday, including an order to provide an extra $400 in weekly unemployment aid to those whose $600 weekly benefits expired in July as well as eviction protections and student loan relief.
A fourth executive order would defer payroll tax payments for people who earn less than $100,000. It would take effect retroactively and continue through December.
The executive order to provide $400 in weekly benefits requires that 25% of that funding be paid by states, many of whom are struggling with unexpected drops in revenue and have pleaded with Congress to receive additional aid.
Trump has sought a payroll tax deferral for more than a year with little support from Congress, but the other three issues were the subject of tense partisan negotiations in recent weeks as some parts of this spring’s CARES Act expired.
Ultimately Congressional leaders failed to reach a deal by their Friday deadline.
The President acknowledged Saturday that the orders would prompt lawsuits. The Constitution grants the power to raise revenue and appropriate funds exclusively to Congress.
The US economy added jobs for a third straight month in July as the nation attempts to reopen and claw back from the devastating coronavirus recession.
American businesses added 1.8 million nonfarm payrolls during the month, according to the Bureau of Labor Statistics. That exceeded the 1.5 million payroll additions expected by economists surveyed by Bloomberg.
The US unemployment rate came in at 10.2%, the BLS said, lower than the 10.6% expected by economists. It was also down from 11.1% in May. April’s 14.7% reading was the highest since the Great Depression of the 1930s.
Employment ticked up across most industries and sectors, according to the Friday report. The biggest gain was in leisure and hospitality, which rose 529,000 in July, accounting for one third of the gain in payrolls during the month.
Retail trade, professional and business services, health care, social assistance, manufacturing, and transportation jobs also gained in July. Construction jobs were little changed from a month earlier, and mining was the only sector to shed jobs in the period.
People on temporary layoff decreased by 1.3 million in July, and is now 9.2 million, roughly half the April level. Permanent job losses were little changed from the previous month, standing at 2.9 million in July. The level of permanent job losses is important to watch as the coronavirus pandemic recession continues — those who are not on temporary layoff have a harder time finding new employment.
The number of Americans applying for unemployment benefits fell to the lowest level since the coronavirus pandemic started in mid-March.
The latest jobless claims figures from the Labor Department, which cover the week ending August 1, show that more than 1.18 million workers sought aid last week, pushing the total number since the shutdown began to more than 55 million.
It marks the 20th consecutive week that jobless claims came in above 1 million; before the pandemic, the record high was 695,000, set in 1982.
Continuing claims, the number of people receiving benefits after an initial week of aid fell by 844,000 to 16.1 million.
“Falling unemployment insurance claims is a positive sign the recovery is progressing cautiously,” said Daniel Zhao, senior Glassdoor economist. “However, this report also shows that unemployment benefits remain a vital life preserver for tens of millions of Americans during a health and economic crisis.”
Wisconsin businesses reported income gains in July, marking the first time since April the state’s businesses did not report losing income, according to new survey results the University of Wisconsin-Oshkosh released Tuesday.
Businesses surveyed statewide said they saw a collective $11 million gain in income compared to July 2019. That’s an improvement from the losses they have seen throughout the pandemic, including $85 million in lost income reported in April when the survey was first conducted. Losses were reported in the months of May and June as well.
The survey asked 593 business owners about how the COVID-19 pandemic has impacted their business. It’s done in partnership with UW-Oshkosh’s Center for Customized Research and Services, the state’s nine regional development organizations and the Wisconsin Economic Development Corp.
Businesses also reported hiring new employees for the first time since May, with nearly 250 workers hired during July. In May, businesses reported firing or laying off nearly 10,000 workers.
A Wisconsin lawmaker said Monday he believes Governor Tony Evers is planning on mandating all schools begin the year with virtual learning in the fall. The possibility of a virtual learning mandate was brought forward by Republican Senator Steve Nass of Whitewater. TMJ4 News talked with Governor Evers who answered the question directly.
Governor Evers cleared the air. He has no plans to mandate all Wisconsin schools go virtual.
“There’s no secret plan out there,” Governor Evers said.
In fact, the governor said he believes any decision on how a school should reopen should be made at the local level for good reason, as every region is seeing a different prevalence of the virus, and every district varies in enrollment.
The Commerce Department said Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew 5.6% last month after a record 8.5% jump in May.
The June gain reflected increased spending on new cars and trucks, clothing, gasoline and recreation as the economy largely reopened last month. Economists polled by Reuters had forecast consumer spending would advance 5.5% in June.
“With June’s increase, inflation-adjusted consumer spending has pulled out of April’s deep hole, though it remains below its pre-pandemic level,” CNBC said.
In April, consumer spending plunged a record 13.6%. Spending in June was boosted by a 6.4% rise in purchases of goods while outlays on services increased 5.2%.