American consumers showed their resilience in August, with retail sales staging a surprise bounce-back last month, as back to school shopping and child tax credit payments from the government provided a likely boost.
Government data released Thursday showed a 0.7 percent jump in retail sales in August after a downwardly revised fall of 1.8 percent the month before.
Sales were even stronger when you strip out autos, since there are fewer cars on the lot due to the ongoing global chip shortage...
And electronics, which are also facing a shortage due to a semiconductor crunch, that has been worsened by the latest stage of the health crisis. Congestion at ports in China is also adding to the supply bottlenecks.
So what did consumers buy and where did they shop? Department stores, general merchandise, and physical stores as a whole saw a nice bump-up in sales during the month of August. Grocery stores also did quite well. But sales at restaurants and bars were flat.
Progress in the labor market is expected to keep consumers in a buying mood and that's good - since consumer spending is responsible for two-thirds of all economic activity.
Even though separate data out Thursday showed first-time applications for jobless assistance were up last week… likely due to the impact of hurricane season, new claims for unemployment benefits have been trending in the right direction. They are hovering near the lowest they've been since millions were pushed out of work last year at the start of the health crisis.