April retail sales are expected to have fallen by a record amount as Americans cut back spending on many nonessentials during the virus-related shutdowns.
Retail sales are expected to be down 12.3% in April, the largest decline since the data series began in 1992.
"I fear this being a very large decline, probably down minus 12% to minus 15% month-over-month," said James Knightley, chief international economist at ING. "That would be consistent with some of the other indicators. We're looking for a 45% annualized decline." Economists expect the April retail sales report to reflect the strange conditions of life in America, as most of the country was shutdown. Consumers stopped going to work. Nobody went to school, or malls or sporting events. Many restaurants were shut but those that were open served only takeout. Consumers drove less so they didn't visit gas stations often, and few bought cars or furniture.
In March, the Cortera spending data on $1.5 trillion in business-to-business transactions contained accurate clues about the retail sales categories that are also in the monthly retail sales report, according to Mark Zandi, chief economist at Moody's Analytics. An area where spending soared was in technology, and Cortera said information technology spending was up 200% from last April. That would have reflected companies helping employees work from home as well as stocking some consumer purchases.One area of firmness for retailers may have been home and garden spending which Zandi said was flat in the Cortera data from last year.
"I'm concerned that it's just not economically viable to open some restaurants," said Knightley, noting the requirements of social distancing could restrict business too much for some small stores and restaurants to be profitable.
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