Retail Spending Fires Back Up
States are beginning to reopen, and consumers are rushing back. Retail sales surged by 17.7% from April to May, according to data released by the Commerce Department on Tuesday. In the period from March to April, retail sales shrank by 16.4%.
Retail sales makes up about a quarter of consumer spending, which in turn accounts for nearly two-thirds of economic growth. The figure is comprised of spending at restaurants, stores, and the internet. Retail sales posted its largest monthly jump on record in May, but remains 6.1% lower than it was one year ago. Clothing and accessories, electronics, appliances, sporting goods, home furniture, and automotive all saw improvements. Retail sales totaled $485.5 billion in May, down from $527.3 billion in February, just before the pandemic hit in full force.
Retail spending was not the only positive measure released on Tuesday. A report from the Federal Reserve showed manufacturing improving by 1.4%, the first gain in three months. Builder confidence surged by 21 points to 58, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index.
The unemployment situation unexpectedly improved in May. After skyrocketing to 14.7% in April, expectations were nearly universal that unemployment would keep rising. Instead, the economy added 2.5 million jobs, and unemployment fell to 13.3%. New claims peaked at nearly 7 million during the last full week of March, but have steadily slipped since then. 44.2 million Americans are currently receiving unemployment benefits.
