No, Retail Sales Growth Didn’t Slow Because of Coronavirus Cases

From the Wall Street Journal:

U.S. shoppers boosted their buying in October for the sixth month in a row, but the pace of growth slowed considerably amid rising coronavirus cases and uncertainty ahead of the U.S. presidential election. Retail sales increased a seasonally adjusted 0.3% in October from a month earlier, the Commerce Department said Tuesday. That fell short of economists’ expectations for a 0.5% rise, and was well below the 1.6% gain in September.

Is this really true? I doubt it:

I’ve mentioned this before, but retail sales are growing now at the same rate they were growing before the pandemic. The reason they’re leveling off is because they have no choice. There’s really no way they can sustain a growth rate higher than the trendline.

This business of constantly trying to explain a single month’s (or day’s) movement in some economic indicator has an ancient lineage, but we really ought to knock it off. The Journal has no more idea of why retail growth flattened than you or I do. What’s more, even a fleeting glance at a chart should suggest that there was no external cause at all. It’s just a matter of how much money people have.

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