US retail sales had stormed past analysts’ expectations last month, rounding off a robust quarter of economic activities, though the United States’ recovery from the pandemic driven slump appeared to have met with a steeper headwind as the US Government had reported a record $3.1 trillion budget deficit over the fiscal year 2020 and a number of heavy-weight companies showed little intent to resume hiring.
In point of fact, according to US Govt. data released on Friday, US retail sales climbed as much as 1.9 per cent last month, beating an analysts’ expectation of a rise of 0.7 per cent, as consumers were reportedly increasing their spending on motor vehicles, clothing alongside other household hobbies amid renewed stay-at-home orders as a pandemic resurgence in the United States had forced tens of millions of people to lock themselves at home.
Nonetheless, despite a jump of 1.9 per cent in US retail sales in September that followed an increase of 0.6 per cent in August on an unadjusted basis, analysts were raising a red flag over the US economy and corrugating on Trump Administration’s reluctance to reach a much-required pandemic stimulus deal with the Congressional lawmakers.
US retail sales report strong gain in September, but dark clouds gathering
However, latest set of upbeat US retail sales data comes over the heels of a raft of downbeat fiscal data, while the Federal Reserve had reported a 0.6 per cent plunge in industrial output in September despite a strident rise in US goods’ orders last month as many businesses remained sceptical over the possibilities of a near-term recovery of the US economy and had kept furloughing workers, eventually piling up pressure on US consumer spending which has been the lifeblood of US economy accountable for roughly two-third of entire US economic activities.
Meanwhile, addressing to a feeble recovery in US economy over the coming months, a chief economist at PNC Financial in Pittsburgh, Gus Faucher said over the weekend, “Although sales growth is strong, it will slow through the rest of this year and into next year.
The slowing will be even larger if Congress does not pass another stimulus bill. Unemployment remains pervasive throughout the U.S. economy. ” However, beaconing at the brighter side of the coin, US retail sales had bounced back above their February level, while the pandemic-led stay-at-home orders had buoyed up demands of home appliances alongside furniture and electronics.