Retail Sales Bounce Up 17.7% After Record Drop As States Reopen

Social distancing instructions are seen at California’s Westfield Santa Anita shopping mall on June 12, as local businesses enter Phase 3 reopening.

Frederic J. Brown/AFP/Getty Images


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Frederic J. Brown/AFP/Getty Images

Social distancing instructions are seen at California’s Westfield Santa Anita shopping mall on June 12, as local businesses enter Phase 3 reopening.

Frederic J. Brown/AFP/Getty Images

As more states and cities reopened restaurants and shopping centers, U.S. retail spending swung big in May, climbing 17.7%.

Spending is still nowhere near last year’s levels because of the coronavirus pandemic, and economists warn of a long and uncertain recovery. But May’s upswing follows a historic collapse in March and April, when retail spending nosedived as people avoided outings for food or shopping, especially for clothes and furniture.

Retail sales — a measure that includes spending on gasoline, cars, food and drink — are a key part of the economy, which is sputtering back at different rates across the country after weeks of lockdowns. As businesses reopen, however, several states have reported new spikes in coronavirus cases.

That has added to warnings that Americans’ shopping habits may be changed for a long time, if not forever. The pandemic, for example, has accelerated the shift to online orders, including food and groceries, which made online retail the only category to see demand grow even during the April meltdown.

Here’s how spending drops affected different parts of retail in May, compared to a month earlier:

  • Clothing and accessories stores: +188%
  • Furniture stores: +89.7%
  • Sports, music and other hobby stores: +88.2%
  • Department stores: +36.9%
  • Restaurants and bars: +29.1%
  • Gas stations: +12.8%
  • Online (nonstore) retailers: +9%
  • Big-box (general merchandise) stores: +6%
  • Grocery stores: +1.3%

There’s another big factor for changes in shopping habits: Mass furloughs and layoffs have left tens of millions unemployed. Companies have started to rehire, but the Federal Reserve is projecting that the unemployment rate will still be more than 9% by the end of 2020.

“Is it possible the worst of the coronavirus pandemic is behind us? Maybe, but we are not out of the woods yet, and uncertainty abounds,” National Retail Federation Chief Economist Jack Kleinhenz said earlier this month. “With such [sizable] disruptions, it is difficult to tally the damage or determine the future.”

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