Retail sales drops by most on record in April
Updated: Jun 5
U.S. retail sales dropped by 16.4% in April in what amounts to the largest drop in consumer spending in a single month on record, according to government figures. Economists were predicting a massive drop of 12.3%.
The decline in spending follows another sharp drop in March of 8.3%, which was the largest decline since 1992 until April's record-breaking number.
Approximately two-thirds of GDP is comprised of consumer spending, which fell 7.6% in the first quarter of 2020 as strict social distancing measures meant to stop the spread of the novel coronavirus prevented economic activity.
The decline in April shows just how significantly the American economy has been affected by the virus and the measures taken to prevent its spread.
While online retail sales continue to steadily climb, physical stores in the retail sector continue to struggle from even before the coronavirus took effect. It appears as though the virus may accelerate a process already in motion as in-person retailers seek to adapt or close their doors in the current environment.
J.C. Penny, one of the largest retailers in the United States, is planning to file for bankruptcy as early as Friday. As of February, J.C. Penny employed about 90,000 full and part-time employees in 846 department stores.
J.C. Penny will join fellow department store retailers Neiman Marcus and Stage Stores in bankruptcy due to the pandemic. Sales at J.C. Penny have fallen annually since 2016.