(Adds details, market reaction)
* Retail sales dive 16.4% in April
* Core retail sales drop 4.6%; March raised to 3.1%
By Lucia Mutikani
WASHINGTON, May 15 (Reuters) - U.S. retail sales endured a
second straight month of record declines in April as the novel
coronavirus pandemic kept Americans at home, putting the economy
on track for its biggest contraction in the second quarter since
the Great Depression.
The collapse in retail sales reported by the Commerce
Department on Friday added to the historic loss of 20.5 million
jobs last month in underscoring the deepening economic slump
that analysts warn could take years to recover from. Federal
Reserve Chair Jerome Powell on Wednesday warned of an "extended
period" of weak growth and stagnant incomes.
Retail sales plunged 16.4% last month, the biggest decline
since the government started tracking the series in 1992, with
only online merchants reporting an increase in receipts. Data
for March was revised to show receipts at retailers falling 8.3%
instead of dropping 8.7% as previously reported.
Economists polled by Reuters had forecast retail sales would
plummet 12.0% in April. Retail sales crashed 21.6% on a
year-on-year basis in April.
With businesses around the country reopening as states and
local governments ease travel restrictions, which were imposed
in mid-March to slow the spread of COVID-19, the respiratory
illness caused by the virus, April could mark the trough for
retail sales. But a sharp rebound is unlikely as establishments
are operating well below capacity.
There are also fears a second wave of COVID-19 infections
could keep consumers away from shopping malls.
Stocks on Wall Street were set to open lower after the Trump
administration's move to block semiconductor shipments to
China's Huawei Technologies ratcheted up fears of trade
hostilities between Washington and Beijing. The dollar
slipped against a basket of currencies. U.S. Treasury prices
rose.
BROAD WEAKNESS
Light motor vehicle sales continued their downward spiral in
April, leading to a 12.4% drop in receipts at car dealerships
after they plunged 25.7% in March. Cheaper gasoline amid weak
demand also depressed sales further at service stations.
Though restaurants and bars have shifted to take-out and
delivery service, sales generated were insufficient to plug the
gap from the suspension of in-person service. Sales at
restaurants and bars plummeted 29.5% last month to a 15-year
low. Sales at food and liquor stores surprisingly fell 13.1%
last month after surging 26.9% in April.
Grocery store sales dropped 13.2%. Still, the sales level in
April was the second-highest on record. The drop last month
probably reflects shortages as the price of food consumed at
home last month posted its largest increase since February 1974.
Receipts at building material and garden equipment stores
fell 3.5% last month. The drop could also be due to a scarcity
of some goods because of bottlenecks in the supply chains.
Online retailers recorded another strong month of sales,
with receipts jumping 8.4% in April after rising 4.9% in March.
Receipts at sporting goods, hobby, musical instrument and book
stores slumped 38.0%. Many retailers have reported being sold
out of exercise equipment as people set up mini-gyms at home.
Clothing stores collapsed 78.8% last month.
The Commerce Department's Census Bureau, which compiles the
retail sales report said though "many businesses are operating
on a limited capacity or have ceased operations completely," it
had "determined estimates in this release meet publication
standards."
Excluding automobiles, gasoline, building materials and food
services, retail sales tumbled 15.3% last month after a surprise
3.1% jump in March. These so-called core retail sales correspond
most closely with the consumer spending component of the gross
domestic product report.
The dive in core retail sales in April supports economists'
predictions of a record collapse in the rate of consumer
spending of 20% to 40% in the second quarter.
Consumer spending, which accounts for more than two-thirds
of U.S. economic activity, tumbled at a 7.6% annualized rate in
the first quarter, the sharpest drop since the second quarter of
1980. The economy contracted at a 4.8% rate in the January-March
quarter. Output is expected to contract at as much as a 40% pace
in the second quarter, the deepest since the 1930s.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Paul
Simao)