U.S. retail sales plummeted in March as the coronavirus pandemic caused business to grind to an almost complete halt and consumers became tighter with their spending habits.
Total U.S. retail sales, which includes sales in stores, online, and in bars and restaurants, fell 8.7 percent from the previous month, according to data released Wednesday by the Commerce Department, beating the previous record decline of 3.9 percent during the Great Recession in November, 2008. The drop is the largest decline since the government began measuring retail sales in 1992.
Auto sales sank 25.6 percent, while clothing store sales dropped off by more than 50 percent. Sales at restaurants and bars suffered a crippling 27 percent drop. Meanwhile, grocery store sales spiked by nearly 26 percent as Americans stocked up on necessary items.
The report comes as governments force mandatory closures of businesses and enforce social distancing rules such as stay-at-home orders to slow the spread of the coronavirus, hobbling many businesses and forcing mass layoffs. Unemployment claims have meanwhile seen a record surge after the U.S. economy lost more jobs than it gained last month for the first time in a decade.
The economic damage to consumer spending, which makes up about two-thirds of the country’s economic activity, is expected to continue despite the Trump administration’s $2.3 trillion economic stimulus package passed last month by Congress. The emergency package includes $250 billion earmarked for direct payments to Americans as well as $350 billion in loans for small businesses hit hard by the pandemic, $250 billion in expanded unemployment insurance, and $500 billion in corporate relief.
During the fall of 2008 in the midst of the Great Recession, sales fell 12 percent before beginning to recover. The toll of the coronavirus outbreak on sales is expected to surpass that damage in just weeks.