Advance estimates of U.S. retail and food services sales for March 2020, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $483.1 billion, a decrease of 8.7 percent (±0.4 percent) from the previous month, and 6.2 percent (±0.7 percent) below March 2019. Total sales for the January 2020 through March 2020 period were up 1.1 percent (±0.5 percent) from the same period a year ago. The January 2020 to February 2020 percent change was revised from down 0.5 percent (±0.4 percent) to down 0.4 percent (±0.2 percent).But hey, real retail sales were only down 8.3% due to the deflation that hit last month!
Even more amazing than the record drop in sales is the wild variance among the various types of retail sales, befitting a country that only has portions of its economy open.
Retail trade sales were down 6.2 percent (±0.4 percent) from February 2020, and 3.8 percent (±0.7 percent) below last year. Food and beverage stores were up 28.0 percent (±0.9 percent) from March 2019, while clothing and clothing accessories stores were down 50.7 percent (±1.8 percent) from last year.And those were far from the only types of stores that had wild changes in business last month.
The shutdowns and related layoffs has led to a lot of GOP talking points and Astroturf trying to get the economy "reopened" as soon as possible, full-speed ahead, regardless of whether COID-19 cases and deaths keep happening. But I got some bad news for WMC and Betsy DeVos and the rest of these hacks - things aren't going to spring back to where they were, no matter how much is reopened.
Despite concerns over the economic crisis, a Gallup poll found that 81% of people currently out of work would not rush back to normal life if the country reopened for business. https://t.co/rxIrrLkaci
— Vox (@voxdotcom) April 15, 2020
I think many are underestimating the depths we are going to be in for the future, and I would not be surprised if many businesses never re-open, even if they are eligible to get a Small Business Loan. Because people won't be going out anywhere near the levels that they were before, most places that rely on entertainment and dining-related spending industries are gong to be hurting big-time.
With this in mind, do you see any way we shouldn't expect year-over-year declines in retail and a lot of other businesses for the next 12 months? Me neither. And even if businesses re-open, I fear that a lot of people that have been laid off as a result of these closings won’t be hired back, because it won't be financially viable for the business to go with full staff. And as those people use up their stimulus checks and deal with lower incomes from unemployment, furloughs, and/or fewer tips, they are likely to cut back further going forward.
In addition, the deflationary prices that many businesses are looking at won’t be conducive to any type of growth in the near term, and likely will encourage more layoffs as they fail to make ends meet. And we are ignoring the spectre of debt-ridden businesses not being able to make their payments, which could cause a larger chain reaction that becomes similar to what we saw in 2007-08. And yes, that could happen despite the trillions of dollars that the Fed in pumping out for now.
Even before we got the retail sales news yesterday, the International Monetary Fund (IMF) also indicated that it will be long road back from the economic damage triggered by COVID-19 shutdowns.
JUST RELEASED: April 2020 World Economic Outlook. The global economy is projected to contract sharply by -3% in 2020 as a result of the #COVID19 pandemic, a much worse contraction than during the 2008–09 financial crisis. Read the latest #WEO https://t.co/93xXDRsg3B pic.twitter.com/LODuvMsrbA
— IMF (@IMFNews) April 14, 2020
If you look at those 2020 and 2021 figures for advanced economies, you can see that we will not gain back what we are losing now, which will mean we would be living with higher unemployment nearly 21 months from now.
I know that there are dopes that want to believe that this coronavirus-prompted shutdown will be a 1-2 month blip and that everything snaps back to “normal” in the Summer. But just like how a lower RATE OF INCREASE of infections still means more people are getting sick, turning a massive decline into a smaller decline doesn’t mean you still aren’t going lower.
One missing thing in this list that willl slow the econony for a while is FEAR...fear of getting caronavirus isn't going to disappear overnight. After people get used to being at home more, even if restrictions are lessened, it doesn't guarantee the masses will rush to the store or shop and buy as much as they can.
ReplyDeleteFear of all different types can cause a lot of problems...most of us have spent time with those who lived through the great depression and still live and spend like they are living in it to this day. It's also important to note that the virus is causing a high level of stress and anxiety that is causing many people to head down the path of more drug abuse, alcoholism, violence and causing more death. Mental support lines are getting overwhelmed just like regular hospitals. There is nothing easy about losing loved ones or having people in the hospital and not being able to visit or to worry about either possibility happening to any of us in the future.
We all remwmber how traumatic 9/11 was for so many, but this event has already resulted in far more death and sickness and it's not even done yet. Even more people could end up without a job than in the financial crisis so spending patterns and society in general could be turned upside down and become very hard to predict. It's important to remember that people generally spend more when they feel financially secure and are in a good mood. I can't speak for others but it seems like most people are staying fairly quiet and don't look all that happy and for many, recent gatherings with family, friends or coworkers were extremely divided before the virus even started.
There have been a lot of people who have stepped forward to make a difference with the virus,and most of us are thankful for that, but i definately can't describe the general public as overly happy, optimistic about tomorrow and feeling financially secure for the future.
The big queston economically I'd really like to know is what is being done to help the bottom 80% everyday people. During the financial crash, we bailed out industries but not individual people who needed help. What is going to be done different this time around to help everyday people feel more secure in this economy where they feel like they can afford to go to the store again? Big business, the government AND the genwral public need to start working together more to try to build an economy where everyone has a place at the table and is valued because the days of most average people not getting a fair deal isn't making America a better place to live and isn't raising living standards for the bottom 80%.
So the politicians can think what they want, and open the economy at any time they choose, but as long as the general public is in this mood... I wouldn't get my hopes that high for a fast recovery to a normal economy because there are still a.lot of problems that need to get fixed.