New York (CNN Business)Americans shopped less than expected last month as the Delta variant swept across the country, fueling concerns that the pandemic might once again weigh on consumer spending and the economic recovery.
Sales declined by 1.1% in July adjusted for seasonal swings, the Census Bureau showed Tuesday. It was a steeper decline than the 0.3% economists surveyed by Refinitiv had predicted. It was also the second decline in three months, suggesting that the pent-up demand that fueled the recovery in the winter and spring spring may have evened out.Meanwhile, other economic data is hinting that the Delta variant might be giving consumers pause. Last week, preliminary data from the University of Michigan showed consumer sentiment plunged in August, dropping to the lowest level since December 2011.
Even with the renewed worries about the pandemic, retail sales are still far above last year’s level, up nearly 16% from July 2020. That’s because the economy has recovered substantially from a year ago.
Sales at online retailers declined 3.1% in July, exceeded only by car and car part dealers, which dropped 3.9%.Read MoreExcluding cars and car parts, overall retail sales declined at a slower pace, falling 0.4%, but still underperformed expectations.
The auto market has turned into a microcosm of the broader pandemic economy over the past year. A rush for vehicles as Americans sought mobility when the economy first started to reopen was exacerbated by chip shortages and plant closures weighing on new car availability.This is a developing story. It will be updated
Source: edition.cnn.com