Retail sales rebound in May

Retail sales surged in May as businesses that were closed due to coronavirus-related lockdowns began to reopen, according to data from the National Retail Federation (NRF) and the federal government, released today.

NRF said May retail sales rose a seasonally adjusted 11% compared to April and were up 1.7% unadjusted compared to year-ago levels. NRF’s calculations exclude car dealers, gas stations, and restaurants “in order to focus on core retail,” the group said. As a result, the figures differ from those of the U.S. Census Bureau, also released today, which include those groups. The Census Bureau reported that overall sales during May rose nearly 18% seasonally adjusted from April, but fell 6% year-over-year. That follows a record-setting 14.7% sequential drop in April, government figures show.

The increase is welcome news, but the long-term outlook calls for caution, NRF leaders said.

“The economy kicked off in May as retailers and other businesses reopened and both stimulus money and supplemental unemployment checks fueled spending driven by pent-up demand from two months of shutdowns,” NRF Chief Economist Jack Kleinhenz said in a statement Tuesday. “But full recovery is still a long way off. Comparisons against April have to be taken in context because April was a full month when almost everything that wasn’t deemed ‘essential’ was shut down. Spending has improved considerably but it’s still far below where it was a year ago, and while the freefall in consumer confidence is over, unemployment remains high and confidence is still at recession levels.”

Kleinhenz added that the reliability of May’s numbers could be questionable because stores in many areas remained closed and retailers were not in their offices to respond to the Census Bureau’s monthly survey of sales data.

Clothing and accessories stores, furniture stores, and sporting goods retailers saw some of the largest monthly gains in May.