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US retail sales increase in June; weekly jobless claims remain elevated
US retail sales increased more than expected in June, but the budding economic recovery is being threatened by a resurgence in new Covid-19 infections and high unemployment.
The Commerce Department said on Thursday that retail sales rose 7.5 per cent last month.
That was on top of the 18.2 per cent jump in May, which was the biggest gain since the government started tracking the series in 1992.
Economists polled by Reuters had forecast retail sales advancing 5 per cent in June.
Retail sales have rebounded as businesses resumed operations after being shuttered in mid-March in an effort to slow the spread of Covid-19.
But new cases of the respiratory illness have exploded, especially in the densely populated South and West, forcing some authorities in these regions to either close businesses again or pause reopenings.
The uncertainty sparked by the spiralling Covid-19 cases is chipping at the recovery, which started in May, and could worsen already astoundingly high unemployment.
The economy had already slipped into recession in February, before the Covid-19-related shutdowns began in the United States.
A separate report from the Labor Department on Thursday showed that 1.30 million people filed for state unemployment benefits during the week ended July 11, slightly down from 1.31 million in the prior period.
Economists had forecast 1.250 million applications last week.
Claims peaked at a historic 6.867 million in late March.
Even now, they remain roughly double their highest point during the 2007-09 Great Recession.
Economists say that claims are being kept uncomfortably high by a second wave of layoffs, which could intensify as the Covid-19 infections depress demand and increase bankruptcies, especially in the retail sector. REUTERS