U.S. Retail Sales Return to Pre-Pandemic Levels
Following an unprecedented plunge in April and a sharp rebound in May, U.S. retail sales continued to recover from the historic slump brought about by the COVID-19 pandemic in June. According to preliminary figures released by the U.S. Census Bureau on Thursday, total retail and food services sales amounted to $524.3 billion last month, up 7.5 percent over May and 1.5 percent over last year's June figure. The latest increase puts retail sales back on its pre-pandemic trajectory, but rising case numbers across the U.S. could stop the comeback in its tracks, as further lockdowns loom.
Due to the widespread lockdown instated to contain the spread of COVID-19, retail sales had plunged 14.7 percent in April, following an already unprecedented 8.2 percent drop in March. To put this in perspective, the highest drop prior to March 2020 had occurred in November 2008, when retail sales declined by less than 4 percent at the height of the financial crisis. As the following chart shows, retail sales have very rarely dipped significantly in the past, with the financial crisis being the most notable exception of the past three decades.
The June rebound was led by those stores hit hardest by the shutdown in the first place, with clothing store sales up 105 percent over May and other specialty stores also seeing double digit increases in sales. While the quick bounce back in consumer spending is certainly encouraging, it needs to be noted that spending levels are still below pre-crisis levels for many retailers. Clothing store sales were still 23 percent below last year's level in June for example, while food services and drinking places trailed last year's sales by 26 percent in June.