Job layoffs, store closures and social distancing led to retail and food service sales skidding a seasonally adjusted 8.7% in March, the largest month-to-month decline since the U.S. Census Bureau began its tracking in 1992 -- even though February sales, which declined by 0.4%, were themselves hurt by looming coronavirus fears.
“Due to recent events surrounding COVID-19, many businesses are operating on a limited capacity or have ceased operations completely,” the Commerce Dept. points out at the start of the report released yesterday.
Short-term prospects offer little hope.
“Even that bleak figure doesn’t capture the full impact of the sudden economic freeze on the retail industry. Most states didn’t shut down nonessential businesses until late March or early April, meaning data for the current month could be worse still,” observe Sapna Maheshwari and Ben Casselman for The New York Times.
“It was a pretty catastrophic drop-off in that back half of the month,” Sucharita Kodali, a retail analyst at Forrester Research, tells them, adding that April “may be one of the worst months ever.”
“The resulting job losses continue to mount. Best Buy, which has 125,000 employees overall, said Wednesday it would furlough 51,000 hourly store workers beginning Sunday, including nearly all of its part-time staff,” Maheshwar and Casselman add.
Meanwhile, “JCPenney said it would miss a bond payment due on Wednesday, putting it on course for a default or debt restructuring, in one of the starkest signs yet the coronavirus shutdown is causing financial distress among U.S. retailers,” Alistair Gray, James Fontanella-Khan and Eric Platt report for Financial Times.
“Sales at clothing stores plunged by more than 50%, while spending on motor vehicles, furniture, electronics and sporting goods fell by double digits,” Harriet Torry and Sarah Nassauer write for The Wall Street Journal.
“The Federal Reserve separately said U.S. industrial production -- a measure of factory, utility and mining output, which includes oil and natural gas production -- fell a seasonally adjusted 5.4% in March, its biggest monthly drop since 1946. Manufacturing output, the biggest component of industrial production, decreased 6.3% from the prior month, also the biggest drop since the end of World War II.
“Meantime, a measure of U.S. home-builder confidence collapsed at a record rate, with the National Association of Home Builders saying its housing market index fell to 30 in April, from 72 the prior month,” Torry and Nassauer continue.
Michigan governor Gretchen Whitmer was the target of demonstrators at the state capital in Lansing yesterday, “with protestors chanting ‘Lock her up!’ to show their displeasure” with her “orders to keep people at home and businesses locked during the coronavirus outbreak. The protest “was organized by the Michigan Conservative Coalition, who have dubbed the effort ‘Operation gridlock,’ with the slogan: ‘She’s driving us out of business. We’re driving to Lansing,’” according to a story in The Guardian.
Indeed, “multiple states have seen protests as stay-a-home orders meant to curb the spread of the coronavirus continue,” USA Today’s Savannah Behrmann reports, including Kentucky, Ohio, Utah, North Carolina and Virginia.
“Many protesters were angry about the economic ramifications the restrictions are causing. Economists surveyed by Bloomberg estimate the Labor Department will report Thursday that 5.5 million Americans filed initial applications for unemployment insurance last week,” Behrmann writes.
It was no better on Wall St. yesterday.
"The Dow Jones industrial average was in the red all day, closing down 445 points, or nearly 1.9%, to finish at 23,504. The Standard & Poor’s 500 index fell 2.2% to 2,783, and the Nasdaq composite slid 1.4% to wind up at 8,393,” Rachel Siegel and Thomas Heath report for The Washington Post.
“Markets shuddered after the major banks reported steep declines in quarterly profits in anticipation consumers would stop paying mortgages and businesses would default on loans. On Wednesday, Bank of America, Goldman Sachs and Citigroup all said their first-quarter profits fell at least 40% compared with the same period last year. On Tuesday, JPMorgan Chase and Wells Fargo announced quarterly drops of 69% and 89%, respectively,” Siegel and Heath add.
Sales at grocery stores, as you might have guessed, were an outlier. They soared 12% over the previous year.
But for a sobering inside view of what it has been like on the other side of the checkout line these days, take a look at “The Stop & Shop Worker Christine Merola’s Report from the Register” in The New Yorker.