The daily business briefing: August 18, 2021
The TSA extends its transportation mask mandate, retail sales fell by 1.1 percent in July, and more
TSA to extend transportation mask mandate
The Transportation Security Administration plans to extend the federal mask mandate for planes, trains, and buses through Jan. 18, Reuters and CNN reported Tuesday, citing sources familiar with the matter. The policy had been scheduled to expire Sept. 13. The Federal Aviation Administration said Tuesday that there have been more than 2,867 cases in which passengers have violated the mandate. The TSA said it did "not yet have an announcement regarding face masks at this time." Association of Flight Attendants-CWA President Sara Nelson said the extension would "help tremendously to keep passengers and aviation workers safe." The union represents nearly 50,000 flight attendants at 17 airlines.
Retail sales fall more sharply than expected
Retail sales fell by 1.1 percent in July compared to June, the Commerce Department reported Tuesday. The decline was steeper than the 0.3 percent fall economists had expected, fueling concerns that the surge in coronavirus tied to the highly infectious Delta variant was putting a dent in consumer demand. Sales fell in numerous categories, particularly auto sales, which fell 3.9 percent. Restaurants were an exception, as their sales rose by 1.7 percent. Shoppers boosted spending on services, a trend Barclays economist Pooja Sriram said should continue even though federal aid to households is waning. Overall consumer spending rose at an annual rate of 11.8 percent in the second quarter.
Fed chair says pandemic has permanently changed U.S. economy
Federal Reserve Chair Jerome Powell said Tuesday that the coronavirus pandemic had permanently changed the U.S. economy. Powell told participants in a Fed virtual town hall for students and educators that the changes included an increase in remote work, more take-out meals offered by restaurants, and more virtual showings by real estate agents. "We're not simply going back to the economy that we had before the pandemic," Powell said. "It seems a near certainty that there will be substantially more remote work going forward. That's going to change the nature of work and the way work gets done." Powell said it was too early to say whether the recent surge in cases attributed to the fast-spreading Delta variant would prompt further changes.
Stock futures struggle after Dow snaps 5-day winning streak
U.S. stock index futures edged lower early Wednesday after the Dow Jones Industrial Average snapped a five-day winning streak on Tuesday. Futures tied to the Dow, the S&P 500, and the Nasdaq were down by about 0.1 percent several hours before the opening bell. On Tuesday, the three main U.S. averages fell after the federal government reported that retail sales fell by 1.1 percent in July, a sharper drop than the 0.3 percent fall economists had expected. The Dow closed down by 0.8 percent, weighed down by a 4.3 percent decline for Home Depot shares. The S&P 500 dropped by 0.7 percent. The tech-heavy Nasdaq fell by 0.9 percent as Facebook, Amazon, Apple, and Google-parent Alphabet all fell.
Walmart in-store sales rise, beating expectations
Walmart's in-store sales rose more than expected in the last quarter as shoppers returned to make in-person purchases of clothes, travel items, and back-to-school supplies, the retailer reported Tuesday. Sales at Walmart stores open at least a year rose by 5.2 percent, beating expectations of 3.7 percent growth, according to IBES data from Refinitiv. The retail giant said its online sales growth slowed sharply, falling to 6 percent from 37 percent in the first quarter. The company increased its annual U.S. same-store sales forecast, saying it now expected same-store sales to increase by 5 percent to 6 percent. Walmart's report kicked off a big week of corporate earnings.