As governor’s lift virus restrictions….
People leave home and begin buying things not just on-line and not just water, toilet paper and paper towels….
A LOT of people aren’t back to work….
And some are just getting laid off….
Sales are still off for the year to date….
And retail sales are NOT overall consumer spending which is DOWN and could actually get worst…
U.S. retail sales increased by the most on record in May after two straight months of sharp declines as businesses reopened, offering more evidence that the recession triggered by the COVID-19 pandemic was over or drawing to an end.
The report from the Commerce Department on Tuesday followed news early this month that the economy created 2.5 million jobs in May. Layoffs are also ebbing and manufacturing activity is improving, though production remains at very low levels.
Still, the record jump in retail sales recouped only a fraction of March and April’s decreases, leaving consumer spending and the economy on track for their biggest contraction in the second quarter since the Great Depression. The economy slipped into recession in February.
“The economy and retail sales have hit the bottom in May and we have a V-shaped first stage of recovery,” said Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles. “However, it will take quite some time to get back to anywhere near the levels of retail sales and economic activity we enjoyed around the turn of the year.”
Retail sales jumped 17.7% last month, the biggest advance since the government started tracking the series in 1992. Data for April was revised to show a record 14.7% drop in sales instead of the previously reported 16.2%. Economists polled by Reuters had forecast retail sales would rise 8% in May.
Retail sales fell 6.1% on a year-on-year basis in May.
Even with May’s surge, sales were still about 8% below their February level. The reopening of nonessential businesses last month after being shuttered in mid-March to slow the spread of COVID-19, the respiratory illness caused by the novel coronavirus, has seen Americans flocking to car dealerships and spending more on gasoline, apparel and at restaurants….
Economists expect consumer spending, which accounts for more than two-thirds of U.S. economic activity, could decline at as much as a 50% annualized rate in the second quarter. That could result in GDP plunging at around a 48.5% pace in that period.
Consumer spending contracted at a 6.8% rate in the first quarter, the sharpest drop since the second quarter of 1980. The economy contracted at a 5% pace in the January-March quarter, the deepest contraction since the 2007-2009 Great Recession.
Despite signs of recovery in retail sales, record savings and the government’s historic fiscal package of nearly $3 trillion providing a cushion for consumers through one-time $1,200 checks and generous unemployment benefits, economists caution that consumer spending is not out of the woods yet.