4 Retail Stocks To Buy On Renewed Hopes Of Economic Recovery

The retail sector has been one of the worst hit by the coronavirus pandemic. Now, with stores, which remained closed for almost 10 weeks, finally opening, retail sales are improving again as more people are stepping out of their homes. This led to a surprise bounce in retail sales in May.

Although a spike in new cases has once again raised fears in millions, it is quite likely that the Fed won’t go for another lockdown given that the focus is on getting the economy back in shape. Consumers too have somewhat adjusted to the new lifestyle. Also, according to latest data, both consumer confidence and consumer spending jumped in May and June, respectively, indicating that the worst maybe is over. So it proves again that retailers, who went through a bad time over the last couple of months, can breathe easy now.

Consumer Confidence, Consumer Spending Soar

Consumer confidence rose to a three-month high of 98.1 in June from a revised 85.9 in May, the Conference Board said earlier this week. The index had almost neared a 20-year high of 132.6 in February before the pandemic shut down swaths of the economy. It had plummeted to as low as 85.7 in April.

Another gauge that assesses how Americans view the next six months — the so-called future expectations index — climbed to 106 from 97.6, just slightly below where it was before the virus spread. This is an indication that people are confident that the virus will eventually ease out and things will once again return to normal. This definitely is a good sign for businesses that had been feeling the heat of the coronavirus pandemic.

Also, consumer spending increased in May. Personal consumption expenditures — the value of goods and services purchased by or for people — grew 8.2% in May from April, marking the metric's first positive result since January. Last month's rebound in consumer spending followed record spending drops of 6.6% in March and 12.6% in April when the pandemic shuttered almost all businesses. 

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