By Lenore Fedow
Retail sales were on the rise in June as store reopenings continued, but an increase in COVID-19 cases have led some to close again.
New York—U.S. retail sales were on the rise in June, but a climb in COVID-19 cases and unemployment numbers remain a threat to the sector.

Retail sales, including food sales, climbed 8 percent month-over-month in June to $524.3 billion, according to data released by the U.S. Department of Commerce Thursday morning.

The results came in ahead of the 5 percent increase economists had expected.

In May, retail sales climbed 18 percent month-over-month following a 15 percent drop in April.

June sales were up 1.1 percent compared with June 2019, the first year-over-year gain since February, near the start of the COVID-19 pandemic.
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“The retail sales numbers from last month were very encouraging and reflect continued progress in the right direction,” said National Retail Federation CEO Matthew Shay in a press release.

The NRF also calculates monthly retail sales, narrowing in on core retail and excluding auto sales, gas stations, and restaurants.

Its calculations show June sales were up 5 percent seasonally adjusted from May and up 9 percent unadjusted year-over-year.

Looking at the commerce department’s data by category, clothing and accessories stores saw the strongest sales gains in June, up 105 percent month-over-month.

Shay said consumers are happy to be back out in their communities and have money to spend as a result of congressional relief packages, but noted retailers are remaining cautious about safety in light of the recent spikes in infection rates.

The rise of COVID-19 cases, especially in states in the South and West, has prompted businesses to pause reopenings or close again, sending unemployment numbers higher.

That uncertainty doesn’t bode well for an economic recovery.

Retail spending is driving an economic recovery, said NRF Chief Economist Jack Kleinhenz, but how long retail spending will improve is directly related to the spread of COVID-19 cases.

“All eyes are on the infections that are accelerating in many parts of the country and they pose a serious threat to recovery,” he said.

Florida, a hotspot for the virus in recent weeks, had more than 315,000 cases and 4,677 deaths as of July 16.

NRF co-signed a letter to President Donald Trump, Vice President Mike Pence and U.S. governors earlier this month calling for a national mask standard in the hopes of slowing the spread of the virus.

“Recoveries do not proceed in a straight line and no two are alike,” Kleinhenz said. “The current economy is far from normal and will require a lengthy period to absorb job losses and build up to where it was before.”

Though government aid for consumers and businesses has helped, Kleinhenz said additional relief will be needed.

A new coronavirus relief package may be in the works when Congress returns from its holiday recess July 20.

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