PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Retail Sales: October Slowdown

By at 17 November, 2020, 5:27 pm

by Raymond J. Keating-

As the economy was heading into the Christmas holiday shopping season, the recovery in retail sales largely hit the brakes in October.

The U.S. Census Bureau has reported that retail and food services sales in October were effectively unchanged compared to September, rising by only 0.25 percent.

Source: Federal Reserve Bank of St. Louis, FRED

In terms of performance of various sectors, nonstore retailers (including ecommerce) saw growth in October of 3.1 percent; building equipment, gardening and supply dealers had 0.9 percent growth; and electronic and appliance stores grew by 1.2 percent.

However, several sectors experienced negative growth, such as furniture stores at -0.4 percent; food and beverage stores at -0.2 percent; clothing at -4.2 percent; general merchandise at -1.1 percent; and food services and drinking places at -0.1 percent.

As a reminder, retail sales late last year and into the first two months of 2020 were sluggish. And then the pandemic knocked retail sales down by 8.2 percent in March and by 14.7 percent in April.

There was a bounce back of 18.3 percent in May and 8.6 percent in June. Growth then slowed, but remained strong at 1.1 percent in July, 1.4 percent in August, and 1.6 percent in September.

In terms of recovering and growing since the initial hit from the pandemic, retail sales have been a bright spot. Hopefully, the slowdown in October is a one-month phenomenon, perhaps attributed, in part, to uncertainty heading into the election.

At the same time, however, with COVID-19 cases again rising across much of the nation, there is reason for concern. The good news that we’ve heard recently from companies Pfizer and Moderna about positive results tied to their vaccines is most welcome. But even if these get to market, it will take time. In the meantime, doctors and scientists are pointing to a few tough months ahead. There is a light at the end of this tunnel, but we still have some distance to cover before getting there.

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

 

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