U.S. retail sales reported more than expected in September and this contributed to economic growth in the third quarter despite the economic downturn due to the surge in Covid-19 infection.
Retail sales jumped 1.9% last month after a 0.6% increase in August as reported by the Commerce Department on Friday. The reading was also much higher than economists expected to target a 0.7% increase in September.
Retail sales rose above expectations in February driven by an increase in demand for household goods, cars, furniture and electronics. In addition, retail sales are also driven by fiscal stimulus by the administration especially weekly subsidies paid to tens of millions of unemployed Americans.
The estimated growth for the third quarter between July-September is estimated to reach a growth of 35.2% per annum. In the second quarter, the U.S. economy contracted by 31.4%, the biggest decline since 1947.
However, the U.S. faces the challenge of running out of funds from the Government. The White House administration and Congress are working to reach a stimulus package agreement for the business and unemployment sectors.
The US dollar index, which measures the US dollar against major currencies, still strengthened at the 93.685 exchange rate as of 9.15 p.m.
