It is no secret that the economy is in a tailspin due to the impact of the COVID-19 pandemic, but sometimes the economic numbers are shocking when they are released, even when the public is braced for bad news. Despite all of the hoarding and buying of supplies, U.S. retail sales hit the skids in March, at a time when many workers were stuck at home and when layoff notices headed for almost 17 million Americans.

Retail sales fell by a sharp 8.7% to $483.1 billion in March. This was the worst decline in decades. The U.S. Department of Commerce had shown that February’s retail sales were down by just 0.4% to $529.3 billion as the economy was starting to slide. Reuters and Dow Jones (WSJ) had both published forecasts predicting an 8.0% drop in March’s headline number.

The 8.7% drop compared with the prior month on a seasonally adjusted basis, but the number was down 6.2% from March 2019.

While the numbers are atrocious, anything tied to automobiles was a handy contributor as car buying tanked as gasoline prices plummeted at the same time gas buying was down. The other issue, despite rising e-commerce activity, was that many retail locations have voluntarily closed until further notice or are under orders to remain closed.

Economists and investors alike know that consumer spending accounts for close to 70% of gross domestic product in the United States. That said, the retail spending for the first quarter of 2020 still managed to hold on to a 1.1% gain over the first quarter of 2019.

Retail trade sales were down 6.2% in March from February, and they were down 3.8% from a year earlier. Food and beverage stores saw a whopping 28.0% gain from March of 2019, but clothing and accessories sales were down by a sharp 50.7% from a year earlier. Gas stations saw sales fall by 17.9% to $35.326 billion in March (compared to March of 2019).

The area that continued to shine was the nonstore retailers, which includes e-commerce sites. This segment saw an annual gain in March of 9.7% to $68.787 billion. Other areas of the economy that showed sharp drops were electronics and appliances stores, motor vehicle parts and car dealers, furniture and home furnishings, and the segment for sporting goods, hobbies, musical instruments and bookstores.

The markets already had been soft coming into Wednesday, along with bank earnings, but the Dow Jones industrials were last seen down 560 points (2.3%), and the S&P 500 was down over 71 points (2.5%) after about 15 minutes of trading.

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