U.S. Retail Sales Expected to Show Continued Growth: Live Updates
September 16, 2020
Here’s what you need to know:
Retail sales are expected to have climbed for the fourth straight month in August, extending a bounce back that has lasted longer than many economists had expected.
The Commerce Department reports the monthly figure on Wednesday and is expected to show that Americans continued to spend on home computers, new cars and online groceries.
The continued rise in consumer spending has occurred against a grim economic backdrop that grew even darker as the $600-a-week supplemental unemployment assistance expired and Congress failed to agree on new stimulus measures. Unemployment declined, but stayed high as huge sectors of the economy — like hospitality, food service and travel — remain largely shut down.
In the face of such broad economic turmoil, the level of spending has surprised some experts, even when factoring in Americans’ seemingly unwavering propensity to shop.
A few factors likely converged, including stock market gains that increased purchases among wealthy spenders and money that people in the lower-income bracket had been saving from their $600 weekly assistance, which ended July 31.
The recovery continued to be strong for some retailers, while others have struggled.
Most apparel chains and department stores have seen sales tumble during the pandemic. In the past six weeks, Lord & Taylor and Century 21, a staple of bargain apparel shopping in New York, joined the growing list of retailers that have filed for bankruptcy in recent months. Both plan to liquidate.
“I would have expected more weakness,” said Scott Anderson, an economist at the Bank of the West. “I think there is a bit of deer-in-the-headlights phenomenon. People are having trouble wrapping their minds around the extent of the economic losses.”
Hitachi said on Wednesday that it would end its eight-year quest to build nuclear plants in Britain. The announcement from the corporate giant’s Tokyo headquarters appears to draw the long saga of Hitachi’s nuclear efforts in Britain to a close.
The decision to pull out leaves unanswered questions about the fate of Hitachi’s prospective site on an island off Wales and about Britain’s future electric power supply. If Britain requires new nuclear power stations, then the Wales site is considered a top candidate to be sold to another developer.
Hitachi’s inability to agree to terms on financing with the British government led to an announcement in January 2019 that it would suspend work on Anglesey Island in Wales and at another site in England. It was forced to write off about $2.75 billion.
Recently, there has been hope in the British nuclear industry that the Wales project could be revived. On Wednesday, Hitachi quashed those hopes, saying “the investment environment has become increasingly severe due to the impact of Covid-19.”
There is a lively debate in Britain about whether the country needs to build new nuclear power plants in order to generate emissions-free power to meet ambitious climate change targets. Most of Britain’s nuclear plants are expected to be retired for age reasons by 2030.
In a statement on Wednesday, Duncan Hawthorne, chief executive of Horizon Nuclear Power, Hitachi’s unit in Britain, appeared to try to stoke interest in the company’s sites. “We will do our utmost to facilitate the prospects for development, ” he said.
Officials at the Federal Reserve are contemplating their next steps after announcing a new approach to interest rate setting last month, one that could lay the groundwork for longer periods of low unemployment and rock-bottom borrowing costs.
But it may be too soon for Fed officials to make big changes to their policy setting because they might need more time to coalesce around their next steps, economists said.
Here’s what to expect at the Fed’s September meeting, which concludes Wednesday:
The Fed slashed interest rates to near zero in March, and it is broadly expected to leave them there for years. Officials are now debating whether to concretely communicate their future plans for rates by promising that they will not lift them until inflation, employment or both cross some preset threshold.
They are also discussing when and how to update their bond buying program. Since March, the central bank has been purchasing large amounts of Treasury and mortgage-backed securities to keep markets functioning smoothly, but officials have signaled that they will eventually shift that program to focus instead on stimulating economic growth.
The central bank’s Summary of Economic Projections, a document in which officials anonymously forecast where interest rates, inflation and unemployment will be in coming years, will get a refresh.
Any changes could add a little more oomph to the central bank’s policies, potentially helping to fuel the recovery from the coronavirus-induced economic crisis.
“It feels like there’s going to be a forward lean from them — there’s a refinement coming,” said Julia Coronado, a former Fed economist and founder of MacroPolicy Perspectives. Still, she does not expect either threshold-based forward guidance or a big tweak to the bond buying program just yet. “This is a big and diverse committee, these are complicated issues, and it is uncharted territory.”
Fending off an eviction could depend on which judge a renter in financial trouble is given, despite a federal government order intended to protect renters at risk of being turned out.
The order, a moratorium imposed by the Centers for Disease Control and Prevention, is meant to avoid mass evictions and contain the spread of the coronavirus. All a qualifying tenant must do is sign a declaration printed from the C.D.C. website and hand it over to his or her landlord.
But it’s not as simple as it sounds: Landlords are still taking tenants to court, and what happens next varies around the country.
Some judges say the order, which was announced on Sept. 1, prevents landlords from even beginning an eviction case, which can take months to play out. Some say a case can proceed, but must freeze at the point where a tenant would be removed — usually under the watchful eye of a sheriff or constable. Other judges have allowed cases to move forward against tenants who insist they should be protected.
With millions of people unemployed and no progress on an agreement on another relief package, housing advocates and legal aid lawyers are fretting over the confusion.
Marilyn Hoffman showed up to a hearing in North Carolina — where court administrators informed state court clerks last week that the protections “must be invoked by a tenant” — and expected to have her eviction case postponed. But the judge refused to accept her signed declaration.
Ms. Hoffman, who rents a single-family house in Sanford, N.C., said the judge seemed to be under the impression the C.D.C. order applied only to rental apartments that were covered by a previous moratorium under the CARES Act, which had a more limited scope. The judge gave Ms. Hoffman, whose monthly rent is $649, 10 days to come up with more than $3,000 in back rent and late fees or face eviction.
“If I had the money, I would pay the rent,” she said.
U.S. stock futures rose on Wednesday, pointing to a gain of about half a percent on Wall Street at the start of trading. On Tuesday, tech shares led stocks higher, with the Nasdaq composite closing up more than 1 percent and the S&P 500 up about half a percent.
Investors were awaiting an update from Federal Reserve officials on the U.S. economic outlook and any change to monetary policy as the central bank’s September meeting comes to an end. Investors were also looking forward to new data on U.S. retail sales, which could provide an indication of how confident consumers were in an economic recovery.
European markets were flat after inching higher earlier in the day. The STOXX Europe 600 index was up about half a percent, while Britain’s FTSE 100 wavered between gains and losses.
Asian markets ended the day mixed, with Japan’s Nikkei slightly higher and China’s Hang Seng index ended in negative territory.
Oil prices rose, with Brent crude, the international benchmark, gaining 2 percent to $41.38 a barrel, after Hurricane Sally shut down more than a quarter of U.S. offshore production on Tuesday.
Europe was supposedly done with political histrionics. In the face of the pandemic, a continent not known for common purpose had put aside long-festering national suspicions to forge a collective economic rescue, raising hopes that a sustainable recovery was underway.
But the European revival appears to be already flagging, and in part because of worries that traditional political concerns may disrupt economic imperatives.
The European Central Bank — which won confidence with vows to do whatever it took to stabilize the economy and support lending — has been hesitant to reprise such talk, sowing doubts about the future availability of credit.
National governments that have spent with abandon to subsidize wages and limit layoffs are wrapping up those efforts, presaging a surge of joblessness.
And in the midst of the worst public health emergency in a century, twinned with the most severe economic downturn since the Great Depression, the British government has opted to unleash a fresh crisis: It has sharply escalated fears that it may follow through with years of bellicose threats to abandon Europe without a deal governing future commercial relations across the English Channel.
A chaotic Brexit would almost certainly worsen Britain’s already terrible economic downturn while also assailing major European trading partners like the Netherlands, France and Spain.
Collectively, these developments have crystallized fresh worries that Europe could find itself mired in bleak economic circumstances for many months, especially as the virus regains strength, yielding an alarming increase of cases in Spain, France, and Britain.
“It’s hard to imagine a recovery that’s going to be strong and sustained given the current situation,” said Ángel Talavera, lead eurozone economist at Oxford Economics in London. “There’s not a lot of engines of growth.”