U.S. retail sales plunge record 16.4 percent in April
"The 16.4 percent drop in retail sales was a gut-punch and a reminder of the gravity of this crisis and how the efforts to contain it are hollowing out key components of the commerce that drives our economy," Tim Quinlan, senior economist of Wells Fargo Securities, wrote in an analysis.
April's plunge almost doubled the record drop set just a month earlier. Retail sales had already seen the biggest monthly decline in March since the Commerce Department started keeping records in 1992, falling by a revised 8.3 percent.
"Due to recent events surrounding COVID-19, many businesses are operating on a limited capacity or have ceased operations completely," the department said in the report.
Clothing and clothing accessories stores, in particular, were down 89.3 percent from April 2019, while non-store retailers were up 21.6 percent from last year.
Noting that the only retailer to report an increase in April was non-store sales, Quinlan said the lockdowns are accelerating the shift to online sales that was already in place for the past several years.
David Reibstein, a marketing professor from Wharton School of the University of Pennsylvania, told Xinhua via email that many businesses that have failed to make the transition "have fallen by the wayside" while other businesses "have emerged if not thrived."
Overall retail trade sales in April were down 15.1 percent from the prior month, and 17.8 percent below last year, the report showed.
Total sales for the February through April period were down 7.7 percent from the same period a year ago.
Quinlan said he and his colleagues forecast personal consumption expenditures to drop at a 30-percent annualized rate in the second quarter.
However, he noted that with lockdowns starting to be lifted and many parts of the country beginning to re-open, April could very well be the bottom for many retailers, meaning sales should begin to recover in May.
The latest retail sales data came one day after the Labor Department reported that nearly 3 million Americans had filed for jobless claims last week as the COVID-19 pandemic continues to sweep the nation.
So far, the eight-week total of jobless people has surpassed a staggering 36 million, indicating the mounting damage to the U.S. labor market as widespread "stay-at-home" orders and nonessential business closures had been implemented since mid-March, before restrictions were loosened in some areas just recently.
"The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II," U.S. Federal Reserve Chairman Jerome Powell said Wednesday in prepared remarks webcast by the Washington-based think tank Peterson Institute for International Economics.
The central bank chief said that while the economic response has been "both timely and appropriately large," it may not be the final chapter, given that the path ahead is both "highly uncertain" and subject to "significant downside risks."
Powell said more policy measures might be needed to support the recovery and avoid a prolonged recession. ■