Read time: 2 min

Crisis Continues: US April Retail Sales Down 16.4%

Social distancing continued in April, cutting further in almost every retail sale category, data released Friday morning showed.

At the same time, industrial production posted another sharp decline and the May Empire State index reflected further, though shallower, contraction in the hard-hit region.

Total retail sales fell by 16.4% to start off the second quarter, below the 11.2% decline expected, with sharp decreases seen in virtually every sales sector. Motor vehicle sales alone fell by 12.4% as dealerships were shuttered.

Sales at non-store retailers, which represent Internet-based outlets, rose 8.4%. That was the only increase in the month.

Food store sales, which jumped by 26.9% in March as panicked shoppers hit the grocery stores, fell by 13.1% in April.

Retail sales excluding motor vehicles fell by 17.2% in April, below the 8.6% decline expected. Likewise, sharply lower gasoline prices and severely reduced driving patterns dragged down gasoline station sales by 28.8%.

Food services and drinking place sales plunged by 29.5% after a 29.7% decline in March, as restaurants survived on only deliveries and carry-out. Part of some states’ reopening plans include allowing restaurants to resume normal dining with social distancing procedures in place such as only allowing outdoor dining.

Building material sales fell by 3.5% in the month after a 0.5% March decline. Many states labeled home improvement stores as essential businesses at the start of the crisis.

The closely watched control group – total sales excluding motor vehicles, gasoline, building materials, and food services – fell by 15.5% after a 3.4% gain in March. Analysts expected control group sales to fall by 3.7%.

March retail sales were revised up to an 8.3% decline from the 8.7% drop previously reported, while ex-motor vehicle sales were revised up to a 4.0% drop from the previously report 4.5% decline.

Including the upward revision to retail trade sales for March, business sales are now calculated to decline by 5.2% when the data are released at 10:00.

Also released at 8:30 am ET, the Empire State index improved to a reading of -48.5 in May from -78.2 in April, above the -65.0 reading expected. The index still indicates sharp contraction in the hard-hit New York region.

The readings for new orders, production, and employment all declined, while delivery times contracted after remaining high in April.

On the upside, the six-month outlook rose in the month to 29.1 from 7.0 in April, suggesting a more solid recovery by the end of the year. The Philadelphia Fed manufacturing survey will be released next Thursday.

Industrial production, released by the Federal Reserve later in the morning, fell by 11.2% in April, in line with the 11.5% decline expected.

Manufacturing production fell by 13.7%, led by a 71.1% drop in motor vehicle production on factory closings and reduced demand. Some factories have started to reopen in May. Analysts had expected a 11.4% decline in the month.

Excluding motor vehicles, manufacturing production would have been down 10.3% and overall industrial production would have been down 8.6%.

Utilities production fell by 0.9%, with electricity production down 3.3% and natural gas production up 10.7%. Mining production fell by 6.1%.

Also Friday morning, the preliminary University of Michigan survey surprised with an-above expectations 73.7 vs the 71.8 in April. May’s current conditions index rose to 83.0 vs. 74.3 in April. The expectations index was 67.7 vs. the previous month’s 70.1.

Kevin Kastner

Julie Ros

Share This

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on reddit

Related Posts in