In yet another sign that the United States economy is fluctuating and changing after the last year of dealing with the COVID-19 pandemic, retail sales in the country have unexpectedly increased in June after falling the month before. Consumer demand for services and some goods still seems to be growing strong. Sales in June have increased even with a continued decrease in auto purchases.
According to the Commerce Department, retail sales rose about 0.6% in June. In May, sales dropped 1.7% — more than the 1.3% they initially reported. Most economists forecasted that another drop in June was expected, so this increase definitely is a surprise.
The Commerce Department revealed this news and explained the increase in sales. For auto purchases, however, sales have continued to decline for multiple reasons. Currently, there is a huge semiconductor shortage on a global level that has stopped car manufacturers from being able to consistently bring out new material. This has also resulted in an increase in car prices, which has then caused a lack in sales.
Plus, many Americans actually bought cars during the pandemic, thanks to savings and stimulus checks. Now, as the United States economy reopens, people are spending more money on services, rather than goods (as they previously did).
Sales also increased across the nation thanks to higher prices. Prices have hiked up for different reasons, though mainly because of supply issues and constraints that are still stemming from the COVID-19 pandemic. However, for many people, this is the first time to really spend money in a long time. Plus, stimulus money received in the past year and household savings have also played a part in this increase in retail sales.
Clothing retail sales have continued to do well, though there are signs that some of this may be tailored in the near future. The United States, as well as the rest of the world, are also dealing with new COVID-19 variant strains, such as the Delta strain, which has caused a surge in infections. Airline stocks have fallen, Los Angeles has mandated masks again, and some are worried that this surge may hurt the economic growth many thought the United States would experience this year.
There really is no telling what to expect, though economists and most analysts are attempting to be both optimistic and realistic. Just as with all parts of recovering from the COVID-19 pandemic, it does appear as if things will change and fluctuate as many adjust to this new normal.
But sales may not be affected overall for the time being. When looking at the sales reported last June, sales this June advanced by 18%. This increase is mainly because of spending in education, travel, and healthcare. Spending at restaurants and bars has continued to increase with each month.
The government also revealed that consumer prices have increased the most in 13 years this past June. Again, the economy is fluctuating as businesses and people attempt to get back to pre-pandemic ways.