Retail sales dropped more than 16 percent in April as coronavirus seized economy
U.S. retail sales plunged more than 16 percent in April as COVID-19 and the measures to contain it closed thousands of stores across the country and derailed the economy, according to data released by the Commerce Department on Friday.
Retail sales fell 16.4 percent in April from March’s total and 21.6 percent from April 2019 levels, stripping the U.S. economy of a critical source of growth. Consumer sales on the whole make up roughly two-thirds of U.S. gross domestic product, and the retail industry has been among the hardest hit by the pandemic and the resulting economic downturn.
The U.S. economy has lost at least 21.4 million jobs since March and more than 36 million Americans have filed new claims for unemployment benefits as the pandemic forced thousands of businesses to close or restrict operations. Unemployment spiked to 14.7 percent in April, according to the Labor Department, but may actually be closer to 20 percent per the projections of economists.
Retailers largely deemed nonessential took staggering losses in April as consumers braced for the worst economic downturn since the Great Depression. Sales at clothing and accessory stores sunk 78.8 percent, electronics stores sales sunk 60.6 percent, purchases from furniture and home goods stores fell 58 percent, and sales at sporting goods, book and hobby stores fell 38 percent from March’s totals.
Sales at restaurants and bars have sunk nearly 30 percent since March as the industry remains restricted to takeout and delivery services in most states. Grocery store sales also dropped 13.2 percent from March, falling back from a 28.6 percent surge that month as Americans stocked up ahead of lockdowns.
As brick and mortar stores continued to suffer, online retailers enjoyed a monthly gain in sales of 8 percent.
More than 30 states have begun to relax restrictions imposed to slow COVID-19 despite rising cases across the country. Several states have allowed retailers to reopen at reduced capacity as President Trump encourages local officials to begin loosening social distancing rules with hopes of a quick economic rebound.
Even so, economists warn that the U.S. will suffer through a long, slow recovery until a vaccine or treatment for COVID-19 gives consumers and businesses confidence to return to their pre-pandemic spending.