May 2020 reported the biggest surge in retail sales in the U.S history. The surge came as consumers started shopping again after authorities lifted coronavirus lockdowns. Retail sales jumped 17.7% topping the 6.7% 2001 record, which was reported in the aftermath of the 9/11 terrorist attack. The new record is above the 8% estimate by Dow Jones.
Retail sales fell 8.3% in March and a further 14.7% in April following lockdowns in large parts of North American in the wake of COVID-19 pandemic. However, many states started easing lockdowns and reopening their economies even as their coronavirus cases continued to surge. However, the rise is just a portion of the record drop reported in the previous months when states started imposing stay-at-home orders to curb the spread of coronavirus.
In February, the US economy went into recession as the pandemic brought a record-long expansion to a halt. March and April saw a drop in employment by 22 million jobs. Payrolls rose by just 2.5 million in May as consumer spending started picking up.
Where Consumers Are Spending Their Dollar
According to figures released by the US commerce department, clothing and accessories reported the biggest gain at 188%, followed by sporting goods, hobby, musical instruments, and book stores at 88.2%. Strong car sales also boosted retail sales as many dealers started reopening showrooms. Motor vehicle sales rose 44.1%, with May’s sale rate going above 12 million vehicles per year after fewer than 9 million units sold in April. Building materials rose 10.9% restaurant receipts surged 29.1% while non-store sales rose 9%.
The figures, which were released just an hour before stock trading saw the Dow rising more than 900 points. The stocks were up by more than 500 points by late morning.
There has been a rise in online sales during the coronavirus lockdown. In addition, building materials stores stayed open during the outbreak. Non-store retailers like Amazon and eBay reported 9% rise in sales in May after posting a 9.5% increase in April. Online sales are up 30.8% this year compared to a year ago.