U.S. Retail Sales See a Record Increase of 17.7%

Nationwide retail sales rose by a record 17.7% from April to May, according to data released by the U.S. Census Bureau. The total sales volume for the month was $485.5 billion.

US retail sales soar 17.7% - biggest monthly increase in history

May’s upswing followed two consecutive months of declines as a result of economic tumult brought on by the COVID-19 pandemic: a record 14.7% plummet in April and an 8.2% drop in March. Online sales maintained their strength and spending in the beaten down core components rebounded sharply during the month.

Within the different retail sectors, the greatest increases in month-over-month sales included clothing stores (up 188%), home furnishing stores (90%), and stores selling sporting goods, books, music and hobby items (88%). Restaurants and bars saw a 29% uptick while auto dealers recorded a 40% increase and gas stations saw their sales up by 13% from April to May.

“Activity started to recover more quickly than we – and others – had been anticipating. As a result, we now estimate that real consumption and overall GDP both contracted at a 30% annualized pace in the second quarter, rather than the 40% fall we previously expected,” Capital Economics wrote in an email Tuesday.

In a recent interview, National Retail Federation CEO Matthew Shay credited the increased sales on a “significant pent-up demand” supported by many consumers with spending cash provided via government stimulus checks and unemployment benefits. But he warned not every retailer will benefit from this jolt in spending.

“The big question will be what happens to those small, independent, those midsize companies,” he said. “Can we get the rest of the economy moving quickly enough that we can bring the small businesses along?”

KPGZ News - Jim Dickerson contributed to this report