GRAPHIC-Fast take: Virtual schooling dents retail sales, Trump economic message

Sept 16- Slower-than-expected sales at retailers in August suggest a speed bump is emerging in the U.S. economic recovery from coronavirus lockdowns, less than two months before the Nov. 3 presidential election. Overall, retail sales have returned to their pre-crisis levels and then some, gaining 0.6% in August, the Commerce Department said on Wednesday.

By Ann Saphir

Sept 16 (Reuters) – Slower-than-expected sales at retailersin August suggest a speed bump is emerging in the U.S. economicrecovery from coronavirus lockdowns, less than two months beforethe Nov. 3 presidential election.

Overall, retail sales have returned to their pre-crisislevels and then some, gaining 0.6% in August, the CommerceDepartment said on Wednesday. The rebound plays into U.S.President Donald Trump’s narrative of resurgent growth after asharp pandemic downturn. Incumbent presidents are generallyhelped at the polls by a strong economy, and hurt by a weak one.

But last month’s rise was driven in part by an increase ingasoline prices, not typically a cause for consumer celebration.Meanwhile core retail sales, a closer measure of underlyingspending trends, fell 0.1% last month. Both readings fell shortof economists’ expectations.

Back-to-school shopping season, or the lack of it, was onecause. Many students actually could not head back to theclassroom because of COVID-19 restrictions, and their curbedspending on supplies helped drive down core retail spending,said Regions Financial Corp economist Richard Moody. Meanwhile,a jump in sales at restaurants and bars drove most of the gainin overall retail sales.

The softening comes as nearly 30 million Americans are onsome form of unemployment insurance. An extra $600 weekly thatout-of-work-adults were getting in government aid expired at theend of July; it was replaced by a program that sent out $300payments, but stopped taking new applicants on Sept. 10.

Lawmakers have so far failed to agree to any new aidpackage, and without more fiscal help, economists say therecovery will stall.

“The economy is weak: there are no two sides around that,”says Eric Winograd, senior economist at AllianceBernstein. Partof a voter’s calculus in picking a president may be, “Do youthink additional stimulus is necessary, and if so what do youwant that to look like?”

(Reporting by Ann Saphir; editing by Heather Timmons and NickZieminski)