Consumer spending took a nose dive in April as the COVID-19 pandemic drove record unemployment and caused many states to continue stay-at-home orders.
Retail sales dropped almost twice as much during April as they did in March as the nation’s economy saw its first full month when most businesses were closed because of the pandemic. Retail sales were down 14.1% seasonally adjusted from March and down 8.7% unadjusted year-over-year, according to the National Retail Federation. (The NRF numbers do not include automobile dealers, gasoline stations and restaurants.)
Total or overall retail sales fell 21.6% in April from a year earlier and were down 16.4% from March, when sales fell 8.3%, according to the U.S. Census Bureau.
Every category of retail except online was down on a monthly basis in April, including grocery stores and others that had seen a surge in March as consumers stocked up. Clothing and accessory stores were in freefall, down 78.8% (and 89.3% year-over-year). Online sales rose 8.4% (and were up 21.2% year-over-year).
Online, grocery stores and building materials were the only categories that saw a year-over-year gain.
Here is how the other retail sectors fared in April over March:
• Building material and garden equipment: -3.4%
• Grocery stores: -13.2%
• Pharmacies and other health/personal care stores: -15.2%
• Big-box (general merchandise) stores: -20.8%
• Department stores: -28.9%
• Sporting goods, music and other hobby stores: -38%
• Furniture/home furnishings stores: -58.7%
• Electronics and appliance stores: -60.6%
- Clothing and clothing accessory stores: -78.8%
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, tumbled at a 7.6% annualized rate in the first quarter, the sharpest drop since the second quarter of 1980.
Jack Kleinhenz, chief economist, NRF, said that the April results were not a surprise since it was the first full month when most businesses not considered essential were closed, both in retail and across the economy.
"But month-to-month comparisons provide little insight other than indicating that most of the economy was on lockdown," he stated. "Now that we’re in mid-May, many businesses are already starting to reopen. Relief payments and pent-up demand should provide some degree of post-shutdown rebound, but spending will be far from normal and may be choppy going forward.”