Already credit card transactions and other high-frequency spending data show consumers are pulling back and staying in. With the uncontrolled spread of COVID infections, just as Americans face the expiration of unemployment benefits and other income support from the CARES Act, conditions are likely to deteriorate further in the coming weeks. Meanwhile, sales at the nation’s shopping centers actually declined by 0.6 percent-their first monthly decline since April-once we exclude e-commerce and sales at other “nonstore retailers.” Sales grew by less than 0.3 percent in October, after averaging 1.4 percent gains over the last three months. Look beneath the topline trends and conditions are not nearly so positive, particularly for physical retailers. These gains are all the more remarkable in the middle of a recession when nearly twice as many people are unemployed now than at the beginning of the year, and millions more workers have dropped out of the labor force or otherwise experienced sharp income declines. After plunging at record rates in the early weeks of the pandemic, retail sales (seasonally adjusted) have climbed back almost as fast and now sit more than 4 percent higher than before the recession. You wouldn’t know it from the headline retail sales figures though. With the coronavirus infection spreading wildly throughout the country, people are returning to their home bunkers and economic activity is slowing back down-and again the retail sector will bear the brunt of the impending economic damage. Winter is arriving early this year for the economy, no matter what the thermometer reads.
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