On Tuesday, US Commerce Department’s retail sales data for May came as a sigh of relief for the world’s largest economy which had been dented amid a deluge of dismal economic data despite an ease of lockdown, as US retail sales in May had increased by the most on record last month after two straight month of sweeping decline, suggesting the recessed US economy which appeared to have bottomed in April led by the pandemic-driven forced closures might soon witness a beacon of hope.
In point of fact, the US Commerce Department’s data on US retail sales that registered a record gain comes over the heels of an encouraging non-farm payroll report released earlier this month that showed the US economy had added 2.5 million jobs in May.
Nonetheless, despite a record upsurge in US retail sales in May, the deep wounds inflicted on March and April, would likely to keep the consumer spending alongside the US economy en route to report their biggest contraction since the Great Financial Depression of 2007-2009 over the second quarter of the year.
Retail sales post record jump, but big hole remains
Aside from that, according to the US Commerce Department data released earlier on the day, the US retail sales for May surged 17.7 per cent, the largest MoM (Month-on-Month) gain since the Government had started to track the data back in the 1992s, compared to a record slump of 14.7 per cent in retail sales in April, however, an analysts’ poll had forecasted a rise of 8 per cent in US retail sales in May.
However, while other data released on Tuesday had reflected an ambivalent tenure including a drop in US business inventories as the pandemic crisis had disrupted imports, voicing a cautiously optimistic tone regarding a rebound of the US economy over the second half of the year, a business economics professor at Loyola Marymount University in LA, Sung Won Sohn said followed by the release of the May retail sales data, “The economy and retail sales have hit the bottom in May and we have a V-shaped first stage of recovery.
However, it will take quite some time to get back to anywhere near the levels of retail sales and economic activity we enjoyed around the turn of the year”. Both US Dollar and Wall St. has sharply bounced back after reveal of a record jump in May US retail sales.