Here we go again.
The rollercoaster numbers of 2020 continue with news that retail sales saw a record 17.7% increase according to the U.S. Census Bureau’s monthly retail survey. The caveat is that this follows record lows in April, which fell 14.7% according to the Census Bureau. Differences in tracking methodology from the National Retail Federation (NRF) and Dow Jones showed April declines of 16.4% and 12.3% respectively.
By the Census Bureau’s own account, retail sales in May are down 6.1% over the same period last year.
“The economy kicked off in May as retailers and other businesses reopened and both stimulus money and supplemental unemployment checks fueled spending driven by pent-up demand from two months of shutdowns,” says NRF Chief Economist Jack Kleinhenz. “But full recovery is still a long way off. Comparisons against April have to be taken in context because April was a full month when almost everything that wasn’t deemed ‘essential’ was shut down. Spending has improved considerably but it’s still far below where it was a year ago, and while the freefall in consumer confidence is over, unemployment remains high and confidence is still at recession levels.”
As with last month’s numbers, the NRF cautions the reliability of Census reporting as stores in many areas were closed and retailers may not have been in their offices to respond to the survey.
“Going forward, wallets are primed, increased foot traffic shows that consumers are returning to stores, and retailers are ready to meet their demand, but we are likely to remain on a roller coaster for a while,” Kleinhenz says. “What we need to look at is the trajectory of employment and the direction of the virus. There’s hope for a turnaround in the economy in the third quarter but if the virus has a reawakening, we’re going to see some serious situations for consumers.”
News of the May sales increases sent the markets on a surge today as investors rallied behind positive news while more than 20 million Americans remain unemployed.