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Special Report

Retail Sales Research Brief

June 2021

Retail Sales Flatten as Shoppers Rely Less on Government Stimulus

Consumer spending well ahead of pre-pandemic level. Although core retail sales dipped 0.8 percent from April to May, expenditures are 15.7 percent above the February 2020 level as stimulus funds and amplified unemployment benefits flooded the economy with additional capital. Monthly gains are anticipated to be modest this year as further direct cash payments are unlikely. Only one more bill can be passed through the Senate with the reconciliation process, and resistance to additional large spending legislation is gaining momentum. Rising inflationary concerns are giving some legislators on Capitol Hill pause. Core inflation jumped 3.8 percent last month, the largest gain in more than three decades. The producer price index, meanwhile, soared 6.6 percent on an annual basis. Collectively, the sharp rise in prices will prompt more caution among budget hawks.

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