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US retail sales blow expectations, dark clouds gathering

October 19, 2020 00:00:00

WASHINGTON, Oct 18 (Reuters): US retail sales accelerated in September, rounding out a strong quarter of economic activity, but the recovery from the Covid-19 recession is at a crossroads as government money runs out and companies continue to layoff workers.

New coronavirus cases are also surging across the country, which could lead to restrictions on businesses like restaurants, gyms and bars, and undercut consumer spending. The economy is already shifting into lower gear. Other data on Friday showed an unexpected drop in output at factories last month.

"Although sales growth is strong, it will slow through the rest of this year and into next year," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. "The slowing will be even larger if Congress does not pass another stimulus bill. Unemployment remains pervasive throughout the US economy."

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