According to a Reuters survey of economists, CNBC reported, retail sales were forecast to have fallen 8.0% last month.
Note: Advance retail sales and food service sales, percent change from the prior month, seasonally adjusted.
Sources: CNBC, St. Louis Federal Reserve, Dow Jones, U.S. Census Bureau
Not all sectors faced declines, however. Grocery stores and mass merchandisers providing food and essentials showed a large increase versus February. Online retailers in select categories also showed an increase in sales. Not surprisingly, motor vehicle and gasoline station sales showed large declines, and the “clothing and accessories” category fared very poorly.
FIGURE 2: MARCH RETAIL STORE SALES BY CATEGORY (% CHANGE VS. FEBRUARY)
Sources: CNBC, U.S. Census Bureau
Bespoke Investment Group notes that both online and general merchandise stores saw spikes in March:
FIGURE 3: TOTAL SHARE OF RETAIL SALES—“BRICKS” VS. “CLICKS”
Source: Bespoke Investment Group
Retail sales were down 6.2% compared to March 2019, according to the Census Bureau. CNBC said, “Economists see no respite for consumer spending in the second quarter, with estimates as low as a 41% rate of decline.”
However, the National Retail Federation, while acknowledging that “the road to recovery could be long and slow,” put a much more positive face on the March report (and first quarter) in looking at “core retail sales”:
Regarding the auto manufacturers and auto dealers not included in the NRF numbers, Barron’s commented last weekend,
The sales decline has hit small businesses particularly hard, especially restaurants. According to a recent National Restaurant Association survey, “the entire restaurant industry has lost two-thirds of its workforce” and is on track to a “COVID-19-related loss of more than $240 billion nationwide by the end of the year.”
The U.S. Chamber of Commerce has been very active in government lobbying and member support efforts to help U.S. businesses. In a press release on April 15, they announced the creation of a nationwide “Save Small Business” initiative. Here is an excerpt from the release:
Goldman Sachs is calling for an overall sharp decline in second-quarter U.S. GDP: a decline of 11% from a year ago and 35% from the previous quarter on an annualized basis. According to the assessment of this forecast, says CNBC, “The global economic hit from the coronavirus crisis will likely be four times worse than the financial crisis and the U.S. will see its highest unemployment rate since World War II.”
While acknowledging the fluidity of the situation and the constantly changing data, Goldman, according to CNBC, forecasts a healthy rebound later in the year: “third-quarter growth up 19% from the Q2 plunge followed by another 12% jump in the final three months of the year.”
“The initial improvement [in outlook] was mostly policy-driven, but the greater optimism of the past week seems to be at least partly related to the virus itself,” Jan Hatzius, Goldman’s chief economist. “It might be possible to bring back at least part of the lost output with a sharp increase in testing as well as more limited changes to business practices that lower the risk of infection.”
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