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Economic commentary

May Economic Review: The worst month ever for the U.S. economy?

After a significant dip in economic activity over the second half of March, April saw perhaps the most rapid downturn on record. Mandatory stay-at-home orders, the (hopefully) temporary closure of “non-essential” businesses, disrupted or broken supply chains, and lack of consumer demand have driven record highs for unemployment. There is a case to be made that the combination of pent-up demand and aggressive monetary and fiscal stimulus will eventually lead to a solid and sustainable expansion, but this will likely require the virus to run its course in one form or another. Until then, the recovery process is likely to prove choppy, resembling more of a W or a U rather than a V. See Nationwide Economics’ take on what's happening and why this month in the economy. 

Economic commentary

Retail spending falls through the floor

Retail sales plunged by a record 16.4 percent for April, with most spending categories down sharply as stock-up buying subsided. When combined with the significant drop from March, total retail spending has declined by nearly a quarter over the past two months. A record drop in gasoline prices for the month led to a 28.8 percent decline in spending at gasoline stations. Widespread stay-at-home orders vastly curtailed in-store expenditures as spending at clothing, furniture, and general merchandise stores saw record declines. Food and drinking places posted a further significant cut in sales while purchases at grocery stores, which surged by 28.6 percent in March as consumers bought for precautionary reasons, fell by 13.2 percent for April. 

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