Retail sales expected to plunge amid coronavirus pandemic

March retail sales data released Wednesday morning will peel back the curtain on the health of the U.S. consumer amid the coronavirus pandemic.

Consensus expectations are for a steep drop during the month due to the rapid spread of COVID-19 in the U.S. Headline retail sales are expected to have plunged 8% during the month, down from a 0.5% decline in February, according to economists surveyed by Bloomberg. Core retail sales, excluding the volatile autos and gas components, are estimated to have fallen 5.2%, down from a 0.2% dip in February.

“Activity during the month likely fluctuated notably and the impact is unlikely to be uniform across all industries,” Nomura economist Lewis Alexander said in a note to clients April 10. “While the March report will reflect average activity, sales were likely notably weaker at the end of the month, when almost all states enforced some type of stay-at-home order, relative to the first week of March.”

Within core components, it is expected that spending online and at grocery stores will largely offset the steep decline in spending at other retailers such as malls and furniture, sporting goods and electronics stores.

Meanwhile with quarantine measures in place in many regions across the country, non-core components will likely have been the hardest. Auto and gas sales likely fell by 50% and sales from food services and of building materials are both set to see large drops, according to Alexander.

A shuttered Macy’s store and empty parking lot are seen at the closed Palisades Center shopping mall during the coronavirus outbreak in West Nyack, New York, U.S., March 20, 2020. REUTERS/Mike Segar

“Given that spending activity was likely much weaker at the end of March, April’s retail sales numbers could be even more bleak or [the] March figure could be revised down in later months as delayed responses are submitted,” Alexander said.

Credit Suisse economist James Sweeney agreed that the worst is yet to come. “March should mark only the beginning of a recessionary decline in consumption and the decline is likely to intensify in April. Overall we expect consumption to fall by 17.5% QoQ annualized in Q2, the worst quarter since WWII,” Sweeney wrote in a note April 9.

As of Tuesday morning, there were just under 2 million cases of coronavirus and 121,726 deaths worldwide. The U.S. has the most infections of any other country, with 583,000 cases and 23,654 confirmed deaths, according to Johns Hopkins University data.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

More from Heidi:

Find live stock market quotes and the latest business and finance news

Follow Yahoo Finance on TwitterFacebookInstagramFlipboardLinkedIn, and reddit.

Source Article