US retail sales growth unexpectedly slowed last month, raising concerns that the expiration of government stimulus measures could be undermining the economic recovery.
Data published on Wednesday showed overall retail sales ticked up only 0.6 per cent in August from the previous month, a slowdown from a 0.9 per cent increase in July and below economists’ expectations for a 1 per cent rise.
The figures offer an early sign of the effects on consumer spending after emergency jobless benefits expired at the end of July.
Lower-income consumers “found that they could no longer sustain spending in the way they did in previous months”, said Neil Saunders, retail managing director of the GlobalData consultancy. “Others, even in more comfortable financial positions, became nervous about spending as the safety net of higher benefits was withdrawn.”
The commerce department data also highlighted the crisis in hard-hit parts of bricks-and-mortar retail. Sales at clothing stores dropped 20 per cent from last year, while department-store sales were down 16.9 per cent.
In stark contrast, spending on categories including DIY, furniture and motor vehicles was higher than it was a year ago. Underlying the growing popularity of online shopping in the pandemic, ecommerce sales jumped 22 per…