Retail sales plunge record 8.7 percent after paychecks disappear
U.S. retail sales tumbled in March by the most on record as the coronavirus forced thousands of the nation’s merchants to close and left millions of Americans without a paycheck.
The value of overall sales fell 8.7% from the prior month, the biggest decline in records dating back to 1992, Commerce Department figures showed Wednesday. Estimates ranged from no change to a 24% drop, with a median projection of an 8% decline.
Eight of 13 major categories decreased, led by a 50.5% plunge at clothing stores and a 26.8% decline at furniture and home furnishing stores, while restaurants and bars were down 26.5%. Food and beverage stores posted a record 25.6% surge as Americans stocked up on essential goods; sales also rose at health and personal care stores, general merchandise stores and nonstore retailers.
Virus containment measures escalated quickly in the month as states began closing restaurants and bars to dine-in customers and urging residents to stay home. Now, almost every state has issued a stay-at-home order and many businesses have temporarily shuttered in the wake. The month was also defined by millions of layoffs, which have continued into April, and sharply reduced spending power.
A separate report Wednesday showed U.S. factory output dropped in March by the most since 1946, while other data indicated manufacturing in New York State shrank in April at the fastest pace in data going back to 2001, highlighting the severe impact of the economic stoppage designed to combat the pandemic.
U.S. stocks fell at the open, while 10-year Treasury yields were lower and the dollar strengthened.
Retail sales were down 6.2% from March 2019 after a 4.6% year-over-year increase in February.
The so-called “control group” subset of sales, which excludes food services, car dealers, building-materials stores and gasoline stations, unexpectedly increased by 1.7% from the prior month, reflecting purchases at grocery stores and general merchandise stores. In more normal times, the measure is viewed as a better gauge of underlying consumer demand, though that’s less the case now.
Filling-station receipts dropped 17.2%, which likely reflected both lower fuel prices and less demand as Americans stayed home. At the end of March, the average nationwide price for a gallon of gasoline was less than $2, the cheapest since early 2016, according to AAA.
Sales at motor vehicle and parts dealers plunged 25.6% from the prior month. Excluding automobiles and gasoline, retail sales fell 3.1%.