US retail sales jumped by a record 17.7 per cent from April to May, with spending partially rebounding after the coronavirus had shut down businesses, flattened the economy and paralysed consumers during the previous two months.
The Commerce Department's report Tuesday showed that retail sales have retraced some of the record-setting month-to-month plunges of March (8.3 per cent) and April (14.7 per cent) as businesses have increasingly reopened. Still, the pandemic's damage to retail sales remains severe, with purchases still down 6.1 per cent from a year ago.
The virus-induced recession 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 nine per cent in May after posting growth of 9.5 per cent in April. Clothiers achieved a stunning 188 per cent monthly gain, but that was not enough to offset a 63.4 per cent drop over the past 12 months.
Retail sales account for roughly half of all consumer spending, which fuels about 70 per cent of total economic activity. The rest of consumer spending includes services, from cellphone and internet contracts to gym memberships and child care.
Last month's bounce-back comes against the backdrop of an economy that may have begun what could be a slow and prolonged recovery. In May, employers added 2.5 million jobs, an unexpected increase that suggested that the job market has bottomed out.
Nearly 80 per cent of small retailers and restaurants tracked by the scheduling tool Homebase that were closed in mid-April have since reopened. Yet these smaller businesses remain under pressure. Their stresses in part reflect changes emerging as social distancing has become essential and shopping habits evolve.
One such retailer, CPW, a women's clothing store, has been in business for 30 years on Manhattan's Upper West Side. A three-month shutdown resulting from the virus sent the store's sales sinking 20 per cent to 30 per cent even as the owner, Linda Wolff, packed and delivered orders to customer homes. Though CPW reopened for curbside pickup a week ago, Wolff said she hasn't rung up a single such sale.
"This is my heart and soul," she said. "I am exhausted from all the worrying."
Some national chains, by contrast, say they have so far avoided their worst fears, a sign of how the damage from the shutdowns has varied widely across the retail landscape.