US retail sales endured a second straight month of record declines in April as the novel coronavirus pandemic kept Americans at home, putting the economy on track for its biggest contraction in the second quarter since the Great Depression.
The collapse in retail sales reported by the Commerce Department on Friday added to the historic loss of 20.5 million jobs last month in underscoring the deepening economic slump that analysts warn could take years to recover from. Federal Reserve chair Jerome Powell on Wednesday warned of an “extended period” of weak growth and stagnant incomes.
Retail sales plunged 16.4 per cent last month, the biggest decline since the government started tracking the series in 1992, with only online merchants reporting an increase in receipts. Data for March was revised to show receipts at retailers falling 8.3 per cent instead of dropping 8.7 per cent as previously reported.
Economists polled by Reuters had forecast retail sales would plummet 12 per cent in April. Retail sales crashed 21.6 per cent on a year-on-year basis in April.
With businesses around the country reopening as states and local governments ease travel restrictions, which were imposed in mid-March to slow the spread of Covid-19, the respiratory illness caused by the virus, April could mark the trough for retail sales. But a sharp rebound is unlikely as establishments are operating well below capacity.
There are also fears a second wave of Covid-19 infections could keep consumers away from shopping malls.
Stocks on Wall Street were set to open lower after the Trump administration’s move to block semiconductor shipments to China’s Huawei Technologies ratcheted up fears of trade hostilities between Washington and Beijing. The dollar slipped against a basket of currencies. US Treasury prices rose.
