- Retail spending cratered a record 8.7% in March.
- The new record dwarfs the previous record of 3.9%.
- Business large and small continue to fight for survival due to the effects of the Covid-19 pandemic.
Another ignominious record has been shattered due to the Covid-19 pandemic. Retail spending during the month of March nose-dived a record 8.7%, by far the largest drop on record since the Commerce Department began tracking retail sales three decades ago.
The previous record was set at the beginning of the Great Recession in November of 2008. The drop that month was 3.9%, less than half the drop shown in last month’s data.
Among the hardest hit sectors were apparel (down over 50%), furniture (down 26%), and autos. Consumer staples were relatively stable, however. About 70% of the U.S. economy is made up of consumer spending.
Economists warn April could hold an even deeper decline in store. Many states and localities had not begun shutting down yet in March. A large portion of businesses have expressed doubt about their ability to survive, and unemployment claims have shattered records as a result of the Covid-19 pandemic and related lockdown orders.
Aid from the recent $2 trillion dollar package passed by Congress has begun to flow, but the extent of damage will not be known for some weeks. Experts agree that workers will need substantive, sustained aid and protections during this disaster.