Retail Sales: Sharp Declines Amid Shutdown
April 15, 2020
Bottom Line: Total retail spending plunged in March as gasoline sales led declines with lower prices at the pump amid shutdowns for the novel coronavirus. Auto sales were down over 25%. Core sales were down a stunning 4.5%, led by stunning declines in some sectors -- clothing retailers were down over 50%, furniture store sales were down nearly 27%, and sporting goods retailers were down over 23%. Food and beverage store sales were up over 25%. Given that most of the shutdowns came in the second half of the month, we can infer massive changes with clothing retailers seeing a drop to almost zero activity and grocery stores seeing a 50% increase in the second half of the month. Non-store retailers were only up 3%, something to watch in the coming month as it appears the increase in demand for core household goods only slightly more than offset the loss in demand for other items. Building material and garden supply store sales were still up on the month, but many parts of the country didn't shut down until April, and construction was allowed to continue selectively before more restrictive shelter-in-place orders in Apri. Overall, this shocking drop in consumption is tracking mostly as we expected. Retail Sales FELL by 8.7% in March, compared with the market consensus for a decrease of 8.0%. The February estimate was revised from -0.53% to -0.45%. Retail sales are now 6.2% BELOW their year-ago level; just a year ago, the year over year growth rate was 4.1%. Spending at motor vehicle dealers fell by 25.6%. Core Retail Sales FELL by -4.5%, compared with the market consensus for a contraction of 5.0%. The February estimate was revised lower from 0.75% to -0.44%. Core retail sales are now 1.7% BELOW their year-ago level; just a year ago, the year over year growth rate was 3.9%. In March, gains at grocery stores (+25.6%), general merchandise stores (+6.4%), nonstore retailers (+3.1%), health and personal care (+4.3%). were more than offset by declines in clothing stores (-50.5%), gasoline stations, primarily due to low gasoline prices (-17.2%), furniture & home furnishing (-26.8%), miscellaneous retailers (-14.3%. Core Retail Sales ex Gasoline FELL by 3.06% and are now 0.2% ABOVE their year-ago level; just a year ago, the year over year growth rate was a moderate 4.0%.
Article by Contingent Macro Advisors