NRF: Delta Variant Pushed Consumer Spending Toward Merchandise in September
Retail sales increased in September as worries about the COVID-19 delta variant pushed consumer spending toward merchandise rather than services like dining, entertainment or travel — despite supply chain disruptions and inflation, the National Retail Federation (NRF)said last week. NRF’s calculation of retail sales — which is based on U.S. Census Bureau monthly retail data but excludes automobile dealers, gasoline stations and restaurants to focus on core retail — showed September retail sales were up 0.7 percent from August, and were up 11 percent year-over-year.
The NRF noted that consumers remained active thanks to stimulus payments, rising wages, and household savings built up during the pandemic. In addition, "some back-to-school spending may have spilled over from August into September because of school districts that delayed opening until after Labor Day," said Jack Kleinhenz, chief economist, NRF, in a statement.
Total Retail's Take: Overall, the September retail report is very promising and shows there may be a strong finish to the year for retailers. But still, economists see reasons for concern in the months ahead, including supply chain disruptions causing backlogs and pushing up prices further, a slowing labor market recovery, and anxious consumers.
"Rising inflation and slower supply chains remain a concern," said Kleinhenz. "Spending might have been higher if not for shortages of items consumers are eager to purchase." Meanwhile, the backup in the supply chain shows few signs of easing. Dozens of ships remain anchored off the coast, waiting to be unloaded at U.S. ports, according to The Wall Street Journal. Furthermore, containers are piled up in warehouses waiting to be shipped as trucking companies struggle to find enough drivers.