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Retail sales growth slowed down in August

September 16, 2020. Summarized by summa-bot.

NEW YORK, NEW YORK - SEPTEMBER 10: The Century 21 department store stands in lower Manhattan on September 10, 2020 in New York City. Following other prominent businesses that depend on in-store shoppers and tourists, Century 21 has announced that it has filed for bankruptcy Thursday and said it will shut down its business. (Photo by Spencer Platt/Getty Images)

Retail sales ticked up in August from the previous month but at a slower pace after the enhanced unemployment benefits provided by the federal government ended.

New York (CNN Business)Retail sales ticked up in August from the previous month but at a slower pace after the enhanced unemployment benefits provided by the federal government ended.

US retail sales rose 0. 6% in August, the Commerce Department reported Wednesday.

In July, retail sales grew 0. 9%, the Commerce Department said.

Consumer spending is the biggest engine of US economic growth, and retail sales are an important component of that.

The report from the Commerce Department, however, does not include spending on services — things like hair cuts, medical care and financial services.

Some economists say continued growth in retail sales depends on future government stimulus funds and relief to people who have lost their jobs.

"A partial relapse [in retail sales] is likely over the next couple of months as people who have been receiving enhanced unemployment benefits. . . cut their spending," Ian Shepherdson, economist at Pantheon Macroeconomics, said in a research report Tuesday.

Retail sales slumped to a seven-year low in April as the coronavirus prompted stores across the country to shut their doors.

Sales bounced back to pre-pandemic levels in July.

"The hard-hit restaurant industry continues to recover," economists at Citi said in a research report Wednesday.

Still, restaurant spending was down 15. 4% in August compared with the year prior.

Although retail sales have bounced back, the spending has not gone to all retailers equally.

So far in 2020, nearly 8,000 stores have said they will permanently close, according to Coresight Research, a retail research and advisory firm.

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