Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Retail Sales Declined 8.7% in March
Posted Under: Data Watch • Retail Sales

 

Implications: Retail sales plummeted in March at a faster pace than any month on record, falling 8.7%.  Sales declines were widespread, but led by autos, restaurants & bars, clothing & accessory stores, and gas stations.  Auto sales fell 25.6%, which leaves room for further declines in April given government-mandated shutdowns.  The same goes for restaurants & bars, where sales were down 26.5%.  Sales in this category will decline sharply again in April.  Sales at clothing & accessory stores fell 50.5%, which makes sense when everyone is too busy stocking up on food and other necessities.  Gas station sales dropped 17.2%, a result of both lower prices and lower sales volume.  The best-performing categories were food and beverage stores (supermarkets and groceries), up 25.6%, non-store retailers (internet and mail-order), up 3.1%, and general merchandise stores (including warehouse clubs), up 6.4%.  Building materials & garden equipment rose 1.3%, possibly signaling relative resilience in the housing sector.  "Core" sales, which exclude the most volatile categories of autos, building materials, and gas station sales, declined 3.5% in March and are down 0.7% from a year ago.  Overall sales are down 6.2% from a year ago.  Plugging these figures into our models suggests "real" (inflation-adjusted) consumer spending (goods and services, combined) fell at a roughly 2% annual rate in the first quarter and that real GDP declined at a roughly 3% rate, although we could adjust these figures later this month before the government releases its initial report on Q1 real GDP on April 29.  This is an astounding turnaround from our pre-Coronavirus estimate that the economy was growing at a 3% rate in Q1, a combination of solid entrepreneurship, lower tax rates, and less of a regulatory burden.  Now, it looks like the second quarter will be even worse than the first, with the steepest drop in real GDP for any quarter since the immediate aftermath of World War II or possibly the Great Depression in the 1930s.  In the months ahead, the timing and pace of the recovery will be largely influenced by the timing and pace of governments at all levels easing restrictions on economic activity (even if gradually), which, in turn, depends on the spread of the virus as well as testing and therapies to fight it.  Until we see some easing, expect the data to remain ugly.

Click here  for PDF version

Posted on Wednesday, April 15, 2020 @ 11:13 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2020 All rights reserved.