(FamilyRetirementClub.com)- The effects of the Chinese coronavirus are still being felt across the country, as many states still have strict lockdown rules stopping businesses from reopening. Of all businesses, perhaps the worst hit are hospitality and retail, with restaurants and stores closed up until the spread of the virus is under control.
New figures released by the Commerce Department show that the United States saw a record decrease in sales in the retail sector, seeing it drop by 16.4% last month.
It was the quickest and most significant drop in retail sales in the entirety of American history, seeing businesses all over the country completely close up shop for weeks at a time. In many states, like California, stores are likely to remain closed for months longer. Democratic Governor Gavin Newsom announced last week that California will be closed for business for another three months, and residents encouraged to stay at home.
Economists knew a decline was coming but predicted an initial decline of 12%. March sales, in reality, dropped by 8.3%, revised down from original official numbers released that suggested an 8.7% drop.
The data showed that the core retail sector, which excludes the gas industries and automotive sales, saw the biggest decline in April, the second month of lockdown. It was driven largely by an 80% reduction in sales in the clothing sector as a result of people not being able to purchase clothes in stores, and many online clothes sellers struggling with warehouse staff shortage.
Online sales did increase, however, but not enough to make up the loss. Online retail aw an increase of 8.4% in sales, as bored shoppers look to spend money that might otherwise have been spent in restaurants and other hospitality businesses.
“These retail sales numbers are not a surprise given the current state of affairs, the CEO of the National Retail Federation Matthew Shay said. “The vast majority of retail stores have been closed, we are in the midst of historic unemployment and when it comes to personal finances, discretionary spending takes a back seat to essentials.”
Before the coronavirus hit the United States, the country was enjoying the highest employment ever. President Trump’s economy was breaking records and the retail sector setting records for year-over-year profits and growth.
Can we recover?