Retail sales fall 9 percent in March, leading to Dow morning plunge – The Sun
US retail sales took a record hit in March as mandatory business closures due to the coronavirus outbreak continue to wallop stores nationwide.
Retail sales plunged nearly nine per cent in March, the biggest decline since the US government began tracking the metric in 1992, the Commerce Department said Wednesday.
It's the second straight month of decline – retail sales fell 0.5 per cent in February, and economists surveyed by Reuters forecasted sales plunging 8 per cent last month.
The brutal retail sales report rippled across stock markets, leading the Dow Jones Industrial Average to open Wednesday morning with a 550-point loss, NBC News reported.
The news comes as more than 10 million Americans are out of work, strengthening experts predictions that the US economy is either heading into or already in a deep recession.
"The economy is almost in free fall," Sung Won Sohn, a business economics professor at Loyola Marymount University in California, told CNBC on Wednesday.
"We will see the bottom when the coronavirus infection rates stabilize. It's going to be a pretty deep bottom from which to come up."
The drag on retail sales from nationwide lockdown restrictions overshadowed the surge in demand for online retailer like Amazon.
Consumers flocked to grocery stores and pharmacies to stock up on household essentials like food, toilet paper, cleaning supplies, and medication.
Consumer spending comprises more than two-thirds of the country's economic activity – but economists' outlook for second-quarter spending is bleak.
Their estimates are as low as a 41 per cent decrease despite the historic $2.3 trillion package passed in late March, which included cash assistance payments to Americans and boosted unemployment benefits.
Economists believe the US entered a recession in March, and some say consumer spending is at its all-time worst.
"In general consumer spending is going to look about as bad as it has ever been, although there will be some categories of resilience," said Tim Quinlan, senior economist at Wells Fargo Securities in North Carolina.
"The panic buying at grocery stores cannot offset the retrenchment in spending that we will see in other categories."
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