Reflecting the impact of the coronavirus-induced shutdown, the Commerce Department released a report on Wednesday showing a record decline in U.S. retail sales in the month of March.

The Commerce Department said retail sales plummeted by 8.7 percent in March after falling by a revised 0.4 percent in February.

Economists had expected retail sales to plunge by 8.0 percent compared to the 0.5 percent drop originally reported for the previous month.

“With widespread lockdowns only beginning around the middle of the March, and the panic buying phase of the crisis over, retail spending looks like it will fall by at least as much again in April,” said Michael Pearce, Senior U.S. Economist at Capital Economics.

The nosedive in retail sales was partly due to a steep drop in sales by motor vehicle and parts dealers, which sank by 25.6 percent in March after sliding by 0.5 percent in February.

Excluding the sharp decline in auto sales, however, retail sales still tumbled by 4.5 percent in March following a 0.4 percent decrease in February. Ex-auto sales were expected to slump by 4.8 percent.

The report showed substantial decreases in most retail segments, with sales by clothing and accessories stores showing a particularly steep 50.5 percent drop.

Sales by furniture and home furnishings stores, food service and drinking places, and sporting goods, hobby, musical instrument and book stores also fell by more than 20 percent.

On the other hand, the Commerce Department said sales by grocery stores spiked by 26.9 percent as people stocked up on food and other necessary items.

Sales by health and personal care stores and non-store retailers also jumped by 4.3 percent and 3.1 percent, respectively.

Core retail sales, which exclude automobiles, gasoline, building materials and food services, also surged up by 1.7 percent in March after falling by 0.5 percent in February.

“While the 1.7% advance in core retail sales highlights the effects of precautionary purchases of essentials ahead of lockdowns, the narrower gauge doesn’t reflect the full extent of the coronavirus hit to consumer outlays in coming months,” said a note from economists at Oxford Economics.

Source: Read Full Article