Retail Sales Rise in August ... DIY leads the charge ...

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Subject: Retail Sales Rise in August ... DIY leads the charge ...

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Saturday 19th September 2020

Hi Friend,

Retail Sales Rise ...

DIY leads the charge ...

Retail sales increased by almost 3% in August. Excluding fuel, total sales volumes increased by over 4%. DIY led the charge. B&Q and others benefited, with DIY sales up by 20%. Garden centres were blooming. Green fingers tapped the tills with a 17% increase in horticultural goods year on year

The public was drinking less apparently. Alcohol sales were down by 6% compared. Alternative medicine provided some relief. Chemist sales were up by 44% and medical goods were up by 17%.

The upturn in the housing market, boosted sales of white goods and floor coverings. Pride in appearance appeared to take a back seat. Sales of clothing, cosmetics and footwear were down over 15%. Watches and jewellery sales were down by 12% in the month.

The surge in online sales continued. The year on year growth was over 50% accounting for 28% of all retail transactions. Online food sales were up by 90% year on year, accounting for 10% of all food action. The pressure on retail continues.

John Lewis announced the closure of four more Waitrose stores this week. In July the company revealed, that eight John Lewis stores would close, including the flagship Birmingham store. Online sales increased by 73% within the group. Radical restructuring will continue within the retail sector.

Book sales were up by 18%. Analysts must have been rushing for the textbooks as the Bank of England suggested it was reviewing once again the possibility of negative interest rates. The MPC decided to maintain the level of interest rates at 0.1% for the moment. Inflation CPI basis slipped to 0.2% in August. The Eat Out to Help Out scheme explained some of the price discount. A stronger Sterling and a weaker oil price undoubtedly helped.

Music sales slipped by 8% as streaming services continued to increase share. A neat segue to point out you can now get The Saturday Economist as a Podcast, available on Apple, Google, Amazon, Spotify and more. Check out the details below ...

Unemployment increases ... but not by much

Unemployment increased in the three months to July by 60,000, to a level of 1.4 million. The u rate moved higher to 4.1% compared to 3.9%. Despite the increase, the employment rate was actually higher. 33.0 million were in work, compared to 32.8 million over the same period last year.

Vacancies in the economy continued to rally from the June floor. The number of vacancies increased to 434,000 up from 341,000 in June, still well off the high of 820,000 in February this year.

Job levels within the economy continue to be supported by the Government furlough scheme. The number of people estimated to be away from work, temporarily, was around 5 million in July. Some evidence suggests this number may have fallen to around 3 million at the end of last month.

The overall picture is confusing, with fears of a radical job loss by the end of the year of great concern. The claimant count increased to 2.7 million by the end of August, an increase of 1.5 million since March. Redundancies are on the increase.

Early indicators suggest the number of employees on UK payrolls was down by 695,000 compared to March according to the ONS. The number of unemployed may have already increased to 2 million. The u rate may have risen to almost 6%.

The Chancellor of the Exchequer is under pressure to extend the furlough scheme. The Treasury is reluctant to continue support in the current form. Rishi Sunak told the BBC this week, looking for new ways to protect jobs is his "number one priority". Finding innovative solutions was top of mind.

Let's hope shutting down the economy for a two week "fire break" doesn't feature in the plans. The Prime Minister announced this week, the second wave is coming. Yes Labour and Tories are neck and neck in the polls ...

That's all for this week! Have a great, safe, week-end ...

John

The Saturday Economist Live is now available as a podcast. You can listen to the updates on your favourite podcast App including Apple, Google, Amazon, Spotify, Overcast, Pocketcast and RadioPublic ...

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The Saturday Economist GDP(O) estimates by sector 2020 ...

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Subject: Retail Sales Rise in August ... DIY leads the charge ...