Weekly economic review & outlook
Retail spending falls through the floor
May 18, 2020
You Need to Know
Week in review
Record plunge in retail sales for April
With consumer activity limited by social distancing and government mandated businesses closings, retail spending plummeted by 16.4 percent for April, following a large drop from March.
Consumer prices are falling, too
The consumer price index (CPI) fell by 0.8 percent for April, while the core CPI posted the largest monthly decline in its history.
Housing starts should see another large drop
Housing starts experienced one of the largest declines on record in March; a similar outcome is expected for April.
Existing home sales will feel the effects of the shutdown
After only a relatively small dip in March due to the lagging nature of the series, April existing home sales will likely show a sharp drop based on pending home sales data.
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.