Fed: May Retail Sales Jumped Record 17.7%

The U.S. economy got some positive news June 16 when the Treasury Department disclosed retail sales in May increased a record 17.7% from the prior month, compared with a 14.7% month-to-month decline in April and an 8.3% drop in March.

While it was the largest increase in monthly retail sales ever, sales are still down 8% from February and 6.1% from May 2019.

The news saw the Dow rally by 800 points and President Trump send out a Tweet praising the stock market and jobs growth.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

With economic shutdowns easing, consumers armed with $1,200 stimulus money (or enhanced unemployment benefits) are slowly heading back to stores and restaurants with their masks.

The food and beverage business saw a 29.1% spike in May revenue. Clothing and accessories sales jumped 188.8%, while media (books, entertainment), hobby and sporting goods increased 88.2%.

Follow us on Instagram

“I think a lot of it is lockdown fatigue,” Beth Ann Bovino, chief U.S. economist at S&P Global, told The New York Times. “I would caution not to be fooled by this large [retail] gain. We still have a long way to go in repairing the economy.”

UPDATE: May Unemployment Rate Actually Higher Due to ‘Misclassification Error’

The percent of unemployed Americans due to the coronavirus pandemic actually increased to 16.3% in May compared with 14.7% in April, according to a “misclassification error” the Bureau of Labor Statistics disclosed on June 5.

“BLS and Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue,” BLS said in its report, first disclosed by The Washington Post.

U.S. Secretary of Labor Eugene Scalia said the improved May un-employment numbers indicated the economy was back on track.

“Today’s report shows much higher job creation and lower unemployment than expected, reflecting that the re-opening of the economy in May was earlier, and more robust, than projected,” Scalia said in a statement.  “Millions of Americans are still out of work, and the Department remains focused on bringing Americans safely back to work and helping States deliver unemployment benefits to those who need them. However, it appears the worst of the coronavirus’s impact on the nation’s job markets is behind us.”

Meanwhile, recent statistics from Datex Property Solutions found that almost 50% of commercial properties did not pay rent in May.

“Social distancing means financial Armageddon for commerical real estate and municipalities in coming months,” fiscal analyst R. Christoper Whalen wrote on his blog.

The Congressional Budget Office projects COVID-19 will have a fiscal impact exceeding $8 trillion and expects the nation’s economy won’t fully recover until 2030. Indeed, with expanded unemployment benefits ($600 weekly) set to expire July 31, a surge in unpaid rent, mortgages, credit card bills and car payments could surge.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“We’re not in a normal recession situation where [the] key priority is getting the unemployment rate down,” Damon Jones, economist at University of Chicago, told The Post. “We’re intentionally keeping the economy in a coma to try to treat it.”

Follow us on Instagram