Retail Sales See Big Bounce in May

By at 16 June, 2020, 11:49 am

by Raymond J. Keating-

The U.S. Census Bureau reported that U.S. retail and food services sales in May experienced a jump of 17.7 percent. That was a record monthly increase in a dataset going back to 1992.

This certainly is a welcome bounce back after declines of 14.7 percent in April, 8.2 percent in March, and 0.4 percent in February. As noted in the following graph, the moves down and up over the last three months have far exceeded even what occurred during the Great Recession.

Source: Federal Reserve Bank of St. Louis, FRED


Source: Federal Reserve Bank of St. Louis, FRED

However, the May level of $485.5 billion is still down markedly from its pre-pandemic level. For example, May’s seasonally adjusted retail sales were down by 8.3 percent compared to January of this year. In addition, the May level registered the same amount (keep in mind that these amounts are in nominal terms) as the level registered in September 2017, that is, 32 months prior.

No doubt, the U.S. economy has a long road ahead to get back to where it should be. It also should be recognized that retail sales were at least partially supported in the short run via government aid distributions.

Of course, uncertainty still reigns in terms of how the pandemic and policy promise to play out in the coming months. But having said all of that, the hope is that the economy at least bottomed in April, and with state economies starting to reopen in May, the long, hard climb back can push ahead.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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