By Josh Mitchell and Suzanne Kapner 
 

WASHINGTON--U.S. households boosted retail spending 1.2% in July, sending sales above pre-pandemic levels in a sign the economy continues to heal from the recession despite a rise in virus infections.

Retail sales--covering spending at service stations, restaurants, stores, and online--rose for the third straight month, the Commerce Department reported Friday. Sales grew 8.4% in June after a double-digit percentage rise in May. Consumers boosted spending on electronics and appliances, health products and restaurant meals.

Meanwhile, fresher data suggest growth in retail spending may have softened this month. One factor: the July 31 expiration of an enhanced unemployment benefit. That benefit-authorized in the Cares Act passed by Congress in March-had boosted jobless Americans' weekly income by $600 a week. Amid congressional deadlock over a new stimulus plan, President Trump has acted to replace the payments with a $300-a-week benefit, but it isn't expected to reach workers for weeks.

A rise in coronavirus infections in several big states earlier this summer prompted a new round of restrictions on businesses and spooked many consumers back into their homes. The prospect of schools moving teaching online this fall may also undermine back-to-school spending.

The upshot: Consumer spending and the economy in general are choppy but growing. The economy has added millions of jobs in the past three months, including 1.8 million in July. Initial jobless claims, a proxy for layoffs, fell below 1 million last week for the first time since March. But the economy still has nearly 13 million fewer jobs than in February, and the unemployment rate remains high, at 10.2% in July.

Write to Josh Mitchell at joshua.mitchell@wsj.com and Suzanne Kapner at Suzanne.Kapner@wsj.com

(END) Dow Jones Newswires

August 14, 2020 09:08 ET (13:08 GMT)

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