- US retail sales jumped a record 17.7% in May, the Commerce Department reported Tuesday. That was more than double the consensus economist estimate.
- The gain comes after two consecutive months of record slumps as the coronavirus pandemic slowed consumer spending activity.
- The sharp rebound is a positive sign that the US economy may be on pace for a V-shaped recovery. Stock futures extended gains on the release.
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US retail sales surged a record amount in May as consumers returned to shopping following the darkest depths of the coronavirus pandemic.
Sales jumped 17.7% in May, the Commerce Department reported Tuesday, following a revised 14.7% in April. The figure came in more than double the 8.4% increase expected by economists surveyed by Bloomberg.
The sharp reversal comes after two consecutive months of record declines in March and April, as the US economy grappled with widespread shutdowns spurred by coronavirus. sharp rebound offers a positive sign that the US economy may be on pace for a V-shaped recovery. Stock futures extended gains on the release, and continued to soar in regular trading.
“It’s now pretty easy to imagine a full reopening of the economy taking all components of retail sales back to their pre-Covid level by, say, July,” Ian Shepherdson, chief economist at Pantheon Macroeconomics wrote in a Tuesday note.
All categories of sales posted gains in May, with the largest gain of 188% in clothing and clothing accessories stores followed by an 88% jump in sporting goods, hobby, musical instrument, and book stores.
Sales of motor vehicles jumped 44.1%, and restaurant sales - which had been hit hard by coronavirus lockdowns - surged 29.1% following a nearly 40% slump in a prior month.
Furniture and home furnishings sales gained 89.7%, while electronics and appliance stores rose 50.5%. Despite the rebound, total spending remains 6.1% below pre-coronavirus levels on a year-over-year basis.
President Donald Trump took to Twitter to cheer the report, saying "looks like a big day for the stock market, and jobs!"
While the May retail sales numbers suggest that the US economy may rebounding from the shock of the coronavirus pandemic and ensuing recession faster than expected, there are still risks ahead. As all 50 states in the US move forward with reopening, there are growing worries that a second wave of coronavirus cases could inflict further damage.
