Retail sales plunge a record 16.4% in April as coronavirus freezes economy
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U.S. retail sales endured the biggest drop in history in April, plunging 16.4 percent as the coronavirus pandemic shuttered businesses around the country and forced residents to stay at home.
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It was the second straight month of declines for the industry as the virus outbreak forces American life to come to a grinding halt and marks the steepest decline since March, when they plunged 8.7 percent. The government began tracking retail sales in 1992.
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Economists surveyed by Refinitiv forecast a decline of 12 percent.
The declines were pervasive across the retail sector, led by a 78.8 percent drop at clothing stores, a 60.6 percent decrease at electronics and appliance stores, and a 58.7 percent decline at furniture stores.
Even with takeout and delivery options, food services and drinking places got clobbered, plummeting 29.5 percent. Food and beverage stores, which saw sales climb in March as Americans stockpiled essential goods, fell 13.1 percent.
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The only area that experienced growth was non-store retailers, which increased by 8.4 percent. That includes online sellers like Amazon.
The report came as millions lost their jobs. In the two months since the virus paralyzed the economy, more than 33 million Americans have filed for first-time unemployment benefits, a rate unseen since the Great Depression. Officially, the unemployment rate is 14.7 percent — the highest on record — but economists have suggested it's likely more than 20 percent.
Consumer spending accounts for nearly two-thirds of the nation's GDP. In the first three months of the year, the U.S. economy shrank by 4.8 percent, the sharpest decline since the 2008 financial crisis.
The severity of the coronavirus-induced downturn will be reflected more accurately in the second quarter, when the nation’s economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely — Goldman Sachs forecast a decline of 34 percent — but economists broadly agree it’ll be grim.
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