Retail sales jump record 17.7% in partial rebound Purchases still down 6.1% from a year ago, report shows

BALTIMORE — U.S. retail sales jumped a record 17.7% from April to May, with spending partially rebounding after the coronavirus had shut down businesses, flattened the economy and paralyzed consumers during the previous two months.

The government’s report Tuesday showed that retail sales have retraced some of the record-setting month-tomonth plunges of March (8.3%) and April (14.7%) as businesses have increasingly reopened. Still, the pandemic’s damage to retail sales remains severe, with purchases down 6.1% from a year ago.

Last month’s rebound comes against the backdrop of an economy that may have begun what could be a prolonged recovery.

In May, employers added 2.5 million jobs, an unexpected increase that suggested the job market has bottomed out. Still, a big unknown is whether early gains in job growth, retail sales and other areas can be sustained over the coming months or whether they may plateau at a low level.

“This may very well be the shortest, but still deepest, recession ever,” said Jennifer Lee, a senior economist at BMO Capital Markets. But she added that it’s “not likely that we’ll see a repeat in June as this is pent-up demand unleashed in one month.”

May’s rebound was likely aided by the $3 trillion in rescue money that the federal government has provided to companies and households. Retail sales would need to surge an additional 9% to return to their level before the pandemic.

Any sustained recovery, though, will hinge on an array of factors: The path of the coronavirus, how willing consumers are to shop, travel and congregate in groups, how many businesses manage to stay open and rehire many workers, and whether the government provides additional support.

Sales at non-store retailers, which include internet companies like Amazon and eBay, rose 9% in May after posting growth of 9.5% in April. They are up a sizable 30.8% from a year ago.

Building materials stores enjoyed a monthly gain of 10.9% last month and annualized growth of 16.4%. Grocers have posed a 14.4% annual sales increase, reflecting fewer people eating out at restaurants because of the pandemic.

Other sectors in retail posted spectacular growth in May yet still face an uncertain future given the blows they absorbed in March and April. Clothiers achieved a 188% monthly gain but still remain down 63% over the past 12 months. Furniture store sales surged 90% last month, but they’re still down more than 21% on the year. This same pattern holds for restaurants, electronics stores, department stores and auto dealers.

Retail sales account for roughly half of all consumer spending, which fuels about 70% of total economic activity. The rest of consumer spending includes services, from cellphone and internet contracts to gym memberships and child care.

Coresight Research, a retail research firm, expects 20,000 to 25,000 stores in the country to close this year, about 60% of them in malls.