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Retail Sales Outperform Expectations in June

By Jennifer Saibil – Jul 16, 2020 at 12:05PM

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But what happens when the stimulus money runs dry?

The U.S. Commerce Department released June retail sales figures on Thursday that beat estimates, soaring 7.5% after an 18.2% jump in May, the biggest gain ever. While that shows great signs of a continued economic recovery, new shutdowns related to the surge in COVID-19 cases and continued high unemployment claims may slow the gains.

The biggest increases in retail came from clothing, which was up 105% from May, but was still down 23% from the prior year. Other big winners were electronics/appliances, which gained 37%, furniture/furnishings (up 33%), and sporting goods/hobbies/music/books (27% higher). That last segment also had the biggest increase (21%) from last year.

A man and a woman shopping together.

Image source: Getty Images.

Other segments that increased year over year were general merchandise, motor vehicles, building materials/garden supplies, food and drink, and non-store retailers.Overall, sales increased 1% over June 2019.

This is good news for retailers that have been struggling, such as Macy's (M -0.54%) and Gap (GPS -0.76%), and maybe even better news for sports-related retailers such as Nike (NKE -0.32%) and Dick's Sporting Goods (DKS -0.38%).

One step forward, two steps back

At the same time, there were another 1.3 million jobless claims filed last week, the same as the week before, and a drop lower than the week of July 4.

JPMorgan Chase (JPM 1.22%) CEO Jamie Dimon said in a conference call on Tuesday, "You will see the effect of this recession, you're just not going to see it right away because of all the stimulus, and in fact, 60% or 70% of the unemployed are making more money than they were making when they were working."

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Nike. The Motley Fool has a disclosure policy.

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