Retail Sales Rebound As States Reopen After COVID-19 Lockdowns

June 16, 2020 by Dan McCue
Manager Angel Ramos arranges shoes on a display in Top shoes, Monday, June 8, 2020, in the Brooklyn borough of New York, after retail stores were allowed to reopen to customers on the first day marking Phase 1 reopening for New York City. (AP Photo/Kathy Willens)

WASHINGTON – Retail sales rebounded across the country in May as a growing number of states allowed stores and restaurants to reopen and consumers were finally allowed to venture out and spend federal stimulus checks and tax refunds.

According to the Commerce Department, in-store and online purchases rose 17.7% in May from the previous month.

The renewed growth comes after retail sales crashed in April, when they saw a 14.7% drop, following an 8.3% decline in March.

Despite the positive numbers for May, the pandemic continued to take a bite out of the sector, seeing purchases still down 6.1% from a year ago.

Economists said some of the sales gains could easily be attributed to the return of warm summer weather and consumers’ belief that the worst of the pandemic is over.

But they were also quick to note that some of the May uptick could be illusory — the byproduct of lockdown fatigue and stimulus checks that totaled $1,200 per recipient, plus $500 per child.

The virus-induced recession has not only diminished spending in most sectors of the economy. It has also accelerated shifts in where people shop and what they buy.

The changes have in many cases intensified the financial strain on traditional physical stores and boosted online purchases.

Sales at non-store retailers, which include internet companies like Amazon and eBay, rose 9% in May after posting growth of 9.5% in April. Clothiers achieved a stunning 188% monthly gain, but that was not enough to offset a 63.4% drop over the past 12 months.

Retail sales account for roughly half of all consumer spending, which fuels about 70% of total economic activity. The rest of consumer spending includes services, from cell phone and internet contracts to gym memberships and child care.

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