Happi Staff05.15.20
Sales at US retailers declined a record 16.4% in April after coronavirus lockdowns shuttered much of the economy, cost millions of jobs and caused an unprecedented drop in consumer spending.
Sales also sank by a revised 8.3% in March, making these the worst back-to-back declines in modern American history.
A huge pullback in spending indicates the economy has already entered a deep recession. Economists polled by MarketWatch forecast a nearly 28% decline in second-quarter gross domestic product, with some even suggesting a decline of 40% or more.
Retail sales tumbled in every category except online shopping, the government said. The only real winners were internet stores such as Amazon.com Inc., and large chains like Walmart, with a big online presence. These companies have been hiring thousands of workers to handle a flood of online orders from customers staying at home or too worried to venture out.
How long a downturn lasts is still an open question. Many states are trying to open their economies, but they are moving slowly to avoid further outbreaks of COVID-19 cases.
“With states either already starting to reopen their economies, albeit at differing speeds, or at the least planning for such a move, retail sales should begin to stabilize and rebound in the months ahead,” said senior economist Andrew Grantham of CIBC Capital Markets. But he cautioned that the rebound will be much slower than the slump in spending.
Sales also sank by a revised 8.3% in March, making these the worst back-to-back declines in modern American history.
A huge pullback in spending indicates the economy has already entered a deep recession. Economists polled by MarketWatch forecast a nearly 28% decline in second-quarter gross domestic product, with some even suggesting a decline of 40% or more.
Retail sales tumbled in every category except online shopping, the government said. The only real winners were internet stores such as Amazon.com Inc., and large chains like Walmart, with a big online presence. These companies have been hiring thousands of workers to handle a flood of online orders from customers staying at home or too worried to venture out.
How long a downturn lasts is still an open question. Many states are trying to open their economies, but they are moving slowly to avoid further outbreaks of COVID-19 cases.
“With states either already starting to reopen their economies, albeit at differing speeds, or at the least planning for such a move, retail sales should begin to stabilize and rebound in the months ahead,” said senior economist Andrew Grantham of CIBC Capital Markets. But he cautioned that the rebound will be much slower than the slump in spending.
