Retail sales continue recovery
Retail sales have continued to recover, with stores and restaurants reopening across the country. According to the Department of Commerce retail report issued October 16, retail sales were up 1.9% in September from the previous month, and up 5.4% from September 2019. Total sales for the three-month period of July through September were up 3.6% from the same period a year ago.
The increase in retail sales has been led by a massive increase in online sales. Non-store sales (primarily online) were up 23.8% from a year earlier in September, although online sales growth has begun to level off, with just a 0.5% increase from the previous month.
Automobile sales have also been a key driver in the retail market. Automotive sales were up 3.6% from the previous month in September and up 10.9% from a year earlier. Home improvement projects during the pandemic have propelled growth in the building materials and garden supplies category, with sales up 0.6% from the previous month and 19.1% from a year earlier. Food and drinking establishments have shown signs of a mild recovery, with sales up 2.1% for the month, but still down 14.4% from a year earlier. Department store sales have also shown signs of life, up 9.7% from the previous month, although still down 7.3% from a year earlier.
Unemployment trends lower
Although weekly unemployment claims have continued to average nearly 800,000 workers, the overall unemployment rate has continued to decline, as previously laid-off workers have begun returning to their jobs. According to the Department of Labor Employment Situation Report issued October 2, the unemployment rate was 7.9% – the fifth consecutive month that the unemployment rate had dropped. The unemployment rate showed signs of improving further during October, although it remains well above pre-pandemic levels.
Utilities up sharply while most sectors dip
The S&P 500 Utilities sector was up 5.04% in October, while most of the 11 market sectors declined for the month. Communications Services, up 0.79%, was the only other sector to post a gain in October. The biggest loser was Information Technology, down 5.10%, although it still leads all sectors year-to-date, up 22.13%. Energy continued to flounder, down 4.41% for the month – and down 50.38% for all of 2020.
The chart below shows the results of the 11 sectors for the past month and year-to-date: