Following an unprecedented plunge in April, U.S. retail sales rebounded sharply in May, according to preliminary figures released by the U.S. Census Bureau on Tuesday. Total retail and food services sales amounted to $485.5 billion in May, up 17.7% from the previous month, but still 6.1% below last year’s May figure.
Due to the widespread lockdown to contain the spread of COVID-19, retail sales had plunged 14.7% in April, following an already unprecedented 8.2% drop in March. To put this in perspective, the highest drop prior to March 2020 had occurred in November 2008, when retail sales declined by less than 4% at the height of the financial crisis. As the chart shows, retail sales have very rarely fallen significantly in the past, with the financial crisis being the most notable exception in the past three decades.
The May rebound was led by stores hit hardest by the shutdown in the first place, with clothing store sales up 188% over April, and other specialty stores also seeing high double-digit increases in sales. While the quick bounceback in consumer spending is encouraging, it needs to be noted that spending levels are still below pre-crisis levels, and significantly so for many types of retailers. Clothing store sales were still 63% below last year’s level in May, for example, despite the spike in sales.