Absence of additional coronavirus relief expected to also undermine consumer spending

U.S. households appear to be tightening their spending on retail goods and services, sapping momentum from the budding economic recovery.
The Commerce Department is set to report figures on July retail sales Friday at 8:30 a.m. ET. Economists think retail salescovering spending at service stations, restaurants, stores, and onlinerose for the third straight month after growing briskly in May and June. But they are expecting a more modest gain this time.
Meanwhile, fresher data suggest retail spending softened this month. One factor: the July 31 expiration of an enhanced unemployment benefit. That benefitauthorized in the Cares Act passed by Congress in Marchhad 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 isnt expected to reach workers for weeks.
On top of that, 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 on a bit of a roller coaster as they recover from a historically severe contraction. 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.