The US retail outlook is declining after the country’s economic recovery slowed in July amid a resurgence of coronavirus cases, according to the National Retail Federation (NRF).
“A lack of clarity regarding job outlook and future finances tends to influence spending behavior,” said NRF chief economist Jack Kleinhenz. “Coupled with that, uncertainty about further fiscal support from Congress is likely to cause consumers to shift more into saving their money and away from spending.”
The end of supplemental unemployment insurance benefits, which will result in many consumers losing income, could also disrupt retail sales, the NRF said.
While the US Census Bureau has not yet released monthly figures for July, the Federal Reserve Bank of New York’s Weekly Economic Index — a composite of 10 indicators that measure real-time economic activity — fell to -7.24% on July 25 from -6.65% on July 18. Officials at the bank have cited decreased retail sales as the main factor in the drop. The decline comes after US retail sales were up 8% in May compared with the previous month, and rose another 6% in June, NRF data showed.
Meanwhile, The Conference Board’s Consumer Confidence Index, which assesses consumer sentiment, fell to 92.6 in July from 98.3 in June.
“Such uncertainty about the short-term future does not bode well for the recovery, nor for consumer spending,” added Lynn Franco, senior director of economic indicators for The Conference Board.