The delta variant of the coronavirus slashed restaurant sales in August, but Americans instead spent more money on other products.
A survey of retailers shows sales rose sharply in the past month, with the exception of a few categories that have been hit the hardest by the pandemic.
Take receipts from restaurants. They barely increased in August after five consecutive months of soaring sales.
The rapidly spreading strain of the coronavirus has forced some people to stay home last month and to cancel plans, such as dinner reservations, plane trips and hotel stays.
Read: Retail sales increase in August despite delta spread and signal U.S. economy is still strong
But delta didn’t stop them from spending.
Instead, Americans spent more on goods. Grocery receipts, for example, jumped 2% and grew at the fastest rate in a year and a half.
“Consumers are shifting spending toward goods and services in light of increasing Covid cases and hospitalizations,” said chief economist Scott Anderson of Bank of the West.
Even with stable sales in August, however, restaurant receipts grew at an annualized rate of nearly 10% in the first eight months of 2021.
Additionally, sales are expected to pick up again if the spread of the delta variant continues to slow. The workload appears to have peaked.
“I expect the consumer to get back to it in October, when the delta wave is expected to be in full swing,” said chief economist Stephen Stanley of Amherst Pierpont Securities.
The strong increase in retail sales in August partially offsets concerns about the economy after a weak employment report in August. The United States created only 235,000 new jobs and none in the service sector – companies like restaurants, theaters and casinos with the most direct contact with customers.
The problem is not the lack of customer demand, as shown by the increase in retail sales. Americans still have a lot of money to spend due to high savings, rising wages and remaining federal stimulus funds.
Read: Half of small businesses can’t find enough workers to fill vacancies
The problem is, millions of Americans are still too afraid to go back to work. The result is a major labor shortage that hinders the ability of businesses to produce enough goods and services to meet demand.
Even with a series of strong economic data, US stocks DJIA,
fell in the Thursday trade. An improving economy should prompt the Federal Reserve to cut back on measures that have fueled economic growth and helped raise stock prices.