Retail sales in US rise less than expected as consumers go slow

Purchases could slow further in the months ahead amid spiralling COVID-19 infections and a reduction in unemployment benefit checks

US retail sales increased less than expected in July as consumers cut back on purchases and could slow further in the months ahead amid spiraling new COVID-19 infections and a reduction in unemployment benefit checks.

Despite the moderation in retail sales reported by the Commerce Department on Friday, sales have recouped losses suffered when businesses were shuttered to slow the spread of the coronavirus. The third straight monthly gain lited retail sales to their highest level since the government started tracking the series in 1992. It supported the view that consumer spending would rebound this quarter after a record collapse in the second quarter.

Economists attributed the increase in retail sales over the past three months to a $600 weekly unemployment benefits supplement from the government, which amounted to almost $75 billion in July. The supplement ended on July 31, leaving economists to expect a decline in retail sales in August.