August retail sales unexpectedly rebound, jobless claims rise from pandemic-era low

Brian Sozzi and Emily McCormick break down the latest economic data within the market, including: U.S. jobless claims seeing a sudden increase to 332,000 as the Delta variant puts the economic recovery at risk and U.S. retail sales seeing a bump in August as the back-to-school season boosts shopping.

Video transcript

- But first, let's start on these retail sales data. Emily, I know you've been going through the report since they hit the wires at 8:30. One number that stood out to me are sales from non-store retailers or online retailers, up 5.3%, really a standout number in this report.

- That's right, Brian. And that was the biggest percentage increase that we saw across these categories for retail sales. And I think what this really points to is, yes, we had this surprise increase in retail sales for August. But the caveat here is that the categories that we saw with some of the biggest increases were the ones that point to stay in place behavior among consumers.

So that does again, point to some of this impact from the Delta variant we had in late summer. But taking a look at some of the headline numbers from this report, overall we saw retail sales up 0.7% in August over July. That was much better than a drop of the same margin that had been expected. And it also came after a drop of 1.8% in July. And now that was downwardly revised from the 1.1% decrease previously reported.

So some good news and some bad news as we take a look at this report on the whole. Now, Brian, as you were mentioning we did see that 5.3% increase in those non-store retailers, those online e-commerce outlets. We also saw furniture and home furnishing store sales up by 3.7%. And grocery store sales up by more than 2%. So again, really pointing to more stay in place behavior.

And if we look on the flip side, we also saw food services and drinking place sales flat on the month, although they're still up 32% over last year. And clothing and accessory store sales were up by just 0.1%. So I think taken together, again, does point to a little bit more staying in place, not as much consumer mobility as we've had, this latest surge in coronavirus cases in the US. And we'll see where things go from here but at least for now definitely seeing some of those virus impacts, Brian.

Yeah, I'm sure a large component of this report, Emily, reflects back to school shopping, especially those online sales, strong in general merchandise. A lot of folks sending their kids back to school in person for the first time in more than a year. A lot of stock up there is sneakers, pencils, pens, you name it, new iPads certainly.

But this is really a surprising report, Emily, just given how the economic data has come in over the past month. Disappointing consumer sentiment, disappointing jobs report in July, but we did get some jobless claims out this morning as well.

- That's right, Brian. If we take a look at the jobless claims number did come in a little bit higher than expected. Not necessarily something you want to see. But again, we were at a low since March 2020 during the previous week. And we're up to slightly from that now at about 332,000 individuals filing on a weekly basis. And of course, during the prior week that was that pandemic era low of 312,000.

But the one big thing that we have to note as we take a look at this weekly jobless claims data, one of the things that this does not capture, if we look at that total number of claimants across state and federal programs, we did see that increase actually in the latest data by nearly 180,000 to come in just over 12.1 million. But given that that total claimants figure is on a couple of weeks delay, this doesn't yet capture any impact from the fact that we did see these federal enhanced unemployment benefits expiring as of September 6 on the national level.

So we are going to see probably millions of individuals rolling off those programs not reflected in these reports anymore as we continue with these weekly reports. So something to keep an eye on as we continue to get more economic data, Brian.