Overall retail sales in March were down -8.7% from February and -6.2% from a year earlier, although total sales for the three month period of January through March 2020 were up +1.1% from the same period a year earlier. COVID-19 related closures caused steep sales drops in clothing stores (-50.5%), furniture stores (-26.8%), restaurants (-26.5%), and auto dealers (-25.6%). Gasoline station sales fell -17.2% as a result of both drop in demand and falling oil prices. However, sales increased for food and beverage stores (+25.6%), general merchandise stores (+6.4%), nonstore (i.e. internet) retailers (+3.1%), and building supply stores (+1.3%).
The COVID-19 pandemic led many factories to suspend operations in late March, and industrial production fell -7.9%, with manufacturing falling -6.3%, for the largest declines since 1946. Durable goods manufacturing fell -9.1% with declines led by motor vehicles (-28.0%), furniture (-10.0%), and aerospace/miscellaneous transportation equipment (-8.1%). Nondurable manufacturing fell -3.2% with the steepest declines in printing (-18.2%), apparel (-16.5%), and textile and product mills (-14.1%). All manufacturing groups declined for the year with the exceptions of computers (+4.9%), wood products (+0.9%), food products (+0.5%), and paper (+0.1%).
The Federal Reserve’s Beige Book summary of economic conditions outlined a sharp and abrupt contraction of activity over all 12 Federal Reserve Districts. Leisure/hospitality and retail were the hardest hit, with the exception of retail for essential goods. Food and medical products were the only two manufacturing sectors uniformly reporting strong demand, and they faced production delays and supply chain disruptions. Employment declines were widespread, with several contacts noting they were laying off or furloughing workers, and hoped to bring workers back once activity resumed. Some districts reported high demand for loans, both from businesses accessing lines of credit and households refinancing mortgages. Business contacts reported a highly uncertain outlook and most expected conditions to worsen over the next several months.
|