U.S. Retail Sales Just Hit a New Low - Architectural Digest

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With states across the country issuing shelter-in-place orders to stop the spread of COVID-19, April saw most nonessential business activity screech to a halt. While an unprecedentedly rapid growth in unemployment claims already told some of the story, new data from the Commerce Department and the Federal Reserve shows just how quickly and significantly economic activity has taken a turn for the worse.

According to a Commerce Department report released Friday, May 15, retail and food service revenue fell by $403.9 billion in April, a head-spinning decrease of 16.4 percent from March. That figure nearly doubled March’s 8.3 percent drop, marking the second straight month of record-setting decline in the 28-year history of these Commerce Department reports. Bloomberg and the New York Times were among the outlets to cover the news.

Unsurprisingly, 12 of the 13 major sectors tracked in the report, including the home furnishing space, suffered a significant April downturn. As was the case in March, clothing stores experienced the most precipitous drop, down 78.8 percent from March and a stunning 89.3 percent from April 2019. Even grocery stores were down 13.2 percent from the panic-buying days of March. Revenue from furniture and home furnishing stores fell from $7.98 billion in March to $3.16 billion in April, a 58.7 percent plummet. Economic activity in this design category was down 66.5 percent from the $9.36 billion generated in April 2019, reiterating how central brick and mortar retail is for this sector.

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While there’s some hope that a shift toward online sales could help at least some furniture retailers claw their way back to stable financial footing, the Federal Reserve’s industrial production report suggests supply chain issues could be on the horizon. Total industrial production plunged 11.2 percent in April, the sharpest monthly decline in the Fed’s 101 years of data collection.

Simultaneously, manufacturing output fell by a record-setting 13.7 percent, and the furniture sector fared even worse. The Fed’s report estimates that manufacturing output for “furniture and related products” decreased by roughly 20 percent in April, slightly outpacing the broader durable goods manufacturing category as a whole.

If there’s any good news about the current economic forecast, it’s that U.S. consumer sentiment is up slightly. The University of Michigan’s latest Survey of Consumers saw a rebound from the eight-year low of April to May, aided by the arrival of CARES stimulus checks and deep price discounts across a variety of sectors. However, the broader data suggests the design industry will see far from an instant turnaround once more states start to reopen.

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U.S. Retail Sales Just Hit a New Low - Architectural Digest
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