Retail sales begin recovery
With most stores and restaurants closed early in the 2nd quarter, retail sales took a precarious fall in April but began to rebound in May. Total retail sales were up 17.7% in May from the previous month but down 6.1% from a year earlier, according to the Department of Commerce retail report issued June 16.
Total sales for the March 2020 through May 2020 period were down 10.5% from the same period a year ago.
Automobile sales rebounded in May – up 46.2% from April sales, but were still down 4.7% from a year earlier. Electronics and appliance stores also began to recover in May, up 50.6% from the previous month, but still down 29.9% from a year earlier.
With many bars and restaurants reopening, food services and drinking places were up 29.1% from the previous month, but still down 39.4% from a year earlier.
Non-store retailers (primarily online) continued to benefit from the effects of the pandemic as more consumers turned to the internet to make their purchases. Sales were up 9.0% from the previous month and 30.8% from a year earlier.
Unemployment high but declining
The U.S. economy gained an unexpectedly high 4.8 million jobs in June, driving down the unemployment rate from 13.3% to 11.1%, according to the Department of Labor Employment Situation Report issued July 2. However, a higher than expected 1.4 million workers filed for unemployment benefits for the first time during the previous week.
The number of unemployed individuals declined by 3.2 million in June to 17.8 million. That is still 12.0 million more unemployed than in February, and the unemployment rate is 7.6% higher than it was in February.
According to the report, “these gains reflect a partial resumption of economic activity that had been curtailed due to the coronavirus pandemic in April and March, when employment fell by a total of 22.2 million in the two months combined.”
The biggest gains came in the leisure and hospitality industry, up 2.1 million jobs, the retail trade, up 740,000 jobs, and education and health services, up 568,000 jobs. Average hourly earnings fell by $0.35 to $29.37.
All sectors rebound in 2nd Quarter
All 11 sectors of the S&P 500 made gains in the 2nd quarter, led by the Information Technology sector, up 30.53%, Materials, up 26.01%, and Communications Services, up 20.04%.
The chart below shows the results of the 11 sectors for the past month and year-to-date: