Retail spending in the United States took a historic plunge last month, as the coronavirus pandemic stalled much of the economy.
Citing data from the U.S. Commerce Department, Bloomberg reports retailers and factories registered a 16.4 percent decline in sales from March to April. Not only was that 4 points worse than initially projected, it also marked the steepest month-to-month drop on record. The department's data also showed retail sales fell by more tha 21 percent from April 2019 to April 2020, further highlighting the struggles many stores are face amid the global health crisis.
"Activity was really suffering from the combination of lockdowns and fear," Gregory Daco, chief U.S. economist at Oxford Economics, told Bloomberg. "Some of the most exposed sectors are, not surprisingly, the sectors that are dependent on consumer spending or on factory work."
Local stay-at-home orders have forced many businesses to significantly reduce or completely halt operations, resulting in widespread income drops due to cut hours, furloughs, and layoffs. The U.S. Department of Labor reported Thursday roughly 36 million people have filed for unemployment since the pandemic was declared in March, though the department noted there has been a steady decline in jobless claims throughout the past six weeks.
"Combined with a spike in the household savings rate and deteriorating confidence that the crisis will be temporary, a heightened sense of thrift among consumers bodes poorly for prospects of a vigorous, consumer-driven rebound later this year," said Bloomberg economists Carl Riccadonna and Yelena Shulyatyeva.
Online retailers was the only sector to register an increase amid the COVID-19 crisis (up 8.4 percent since March). Clothing and accessories took the biggest hit with sales falling by nearly 79 percent. Furniture stores came in second with a 58.7 percent drop, followed by sports/music stores (38 percent), department stores (28.9 percent), and big-box stores (20.8 percent).
"With 15 of the 18 manufacturing sector industries — including five of the six big industry sectors — predicting revenue declines for 2020, panelists forecast that recovery will likely not occur until near the end of the year," Tim Fiore, chairman of the ISM manufacturing business survey committee, said in a statement.