The National Retail Federation or NRF said that while the rebound in U.S. retail sales for the month of May was encouraging, it still remained well below spending levels compared to the same period a year ago.
U.S. retail sales rebounded sharply in May as retailers and other businesses closed by the coronavirus pandemic began to reopen. Stimulus money and supplemental unemployment checks fueled the spending that was driven by pent-up demand following two months of shutdowns.
The U.S. Census Bureau reported Tuesday that overall retail sales skyrocketed by 17.7 percent in May after plunging by a revised 14.7 percent in April. However, May retail sales were down 6.1 percent year-over-year. Economists had expected retail sales to spike by 8.0 percent.
In comparison, the NRF’s calculation showed that retail sales – which excludes automobile dealers, gasoline stations and restaurants in order to focus on core retail – rose 11 percent seasonally adjusted from April, and were up 1.7 percent unadjusted year-over-year.
The NRF noted that its monthly increase was lower than that of the Census Bureau, as the categories it excluded were among those most affected by the shutdowns.
“For a sick economy, there is no better medicine than retailers responding to consumers who are ready to safely return to stores. These sales numbers do not reflect the same strength we had going into the pandemic, but they certainly reflect the trajectory we need coming out of it,” NRF President and CEO Matthew Shay said during a live interview on CNBC’s Squawk Box program.
NRF Chief Economist Jack Kleinhenz noted that while spending has improved considerably, full recovery was “still a long way off.”
He cautioned that while there was hope for a turnaround in the U.S. economy in the third quarter, a re-surge in coronavirus infections would results in some serious situations for consumers.
Kleinhenz added that the trajectory of employment and the direction of the coronavirus need to be monitored closely.
Source: Read Full Article