No denying May’s $73 billion rebound in U.S. retail sales was an eye-popper and is the latest fodder to fuel the red-hot “V” vs “U” debate about what kind of recovery to expect from the COVID-19 recession.
Even Federal Reserve Chair Jerome Powell, who has taken pains lately to caution everyone that this is likely to be a fitful and for many a painful recovery, called Tuesday’s retail sales report from the Commerce Department an encouraging sign.
But, to be clear, while the rebound was strong overall, sales remain 8% below where they were in February, and many corners of retail are miles shy of where they were just three months ago when coast-to-coast stay-at-home orders brought many businesses to a full standstill.
CARS AND TRUCKS
May’s sales boom owes a lot to Detroit. Sales in the automotive sector – led by car and truck dealerships – rose by more than $30 billion from April, accounting for more than 40% of the overall retail sales increase.
EVERYONE HAS A PROJECT
With everyone spending more time at home, Americans also decided to spend more money on their homes. Sales at home and garden centers surged to a record high last month, and are one of just three major retail categories up from a year earlier, the others being grocery stores and online retailers.
The anecdotes about jigsaw puzzle shortages have been circulating for months, but May’s sales resurgence in the sporting goods, hobby, musical instruments and bookstore category shows this was no myth. Bicycles, home fitness gear and good, old books are also in high demand.
THE BAR IS OPEN
Sales at hard-hit restaurants and bars shot up nearly 30% as states relaxed social-distancing rules, but that only brought the sector’s overall receipts back to where they were a decade ago.
CLOTHING – BOTTOM OF THE RACK
Clothing retailers notched the largest percentage increase in May – a stunning 188%. Impressive until the low base is taken into account. Sales are still just a third of February’s level.