National retail sales rose 17.7 percent in May, marking the biggest increase in records spending dating back to 1992, as thousands of stores and restaurants began to reopen after coronavirus-induced lockdowns were lifted and consumers were freed to fuel the spending burst.
According to the Commerce Department report released by the Census Bureau Tuesday morning, retail and foodservice total sales jumped 17.7 percent for May after diving 14.7 percent in April with sales totaled $486 billion. The report also showed that retail sales have retraced some of the record-setting month-to-month plunges of March (8.3%) and April (14.7%) caused by widespread business closures driving retail sales to their lowest level since 2013. Economists broadly expected retail sales to climb between 7 and 8 percent in May.
Food services, bars, and restaurant establishments saw a 29.1 percent rebound in May as some states began allowing outdoor dining. Hard-hit retail categories, such as apparel and furniture sales after being almost completely shuttered during the lockdown showed strong gains last month, with sales at clothing stores rising 188 percent after falling 75.2 percent the prior month. Sporting goods, hobby, music, and book stores saw an 88.2 percent rise in sales from April to May, sales at furniture and home good stores rose 89.7 percent, and sales at electronics and appliance stores rose 50.5 percent.
Retail sales account for roughly half of all consumer spending, which fuels about 70 percent of total economic activity. Consumer sales make up roughly two-thirds of U.S. gross domestic product, and the retail industry has been among the hardest hit by the pandemic and the resulting economic downturn. In May, employers added 2.5 million jobs, dropping the unemployment rate from 14.7 to 13.3 percent.
In April, retail sales fell 16.4 percent from March’s total and 21.6 percent from April 2019 levels, stripping the U.S. economy of a critical source of growth. Unemployment spiked to 14.7 percent in April, according to the Labor Department. Retailers largely deemed nonessential took staggering losses in April as clothing sales sunk to a low of almost 79 percent, electronics stores sales sunk 60.6 percent, purchases from furniture and home goods stores fell 58 percent, and sales at sporting goods, book and hobby stores fell 38 percent from March’s totals.
Despite the resurgence that shows the latest quicker than expected rebound, retail sales were 6 percent below its level in 2019. However, the headline topped the 6.7 percent record reported from October 2001 — a month after the 9/11 terrorist attacks and beating the 8% estimate from economists surveyed by Dow Jones.
President Trump touted the report on the jump as a positive sign for the recovery amid the coronavirus pandemic.
“Wow! May retail sales show biggest one-month increase of ALL TIME, up 17.7%. Far bigger than projected,” Trump tweeted Tuesday morning. “Looks like a BIG DAY FOR THE STOCK MARKET, AND JOBS!”
The government numbers released an hour before the start of stock trading added to an upbeat jump on Wall Street with the Dow rising more than 800 points in the premarket. By late morning, stocks were up more than 500 points.