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Retail Sales Collapse

This morning retail sales were announced for March. They were down a record 6.2% in one month. As you can see clearly from this graph, this was the biggest drop on record.

Retail Sales from 1992 to 2020

The largest drop in one month in the financial crisis recession was only around 4%.

Even though this is a larger drop than any month in 08-09, it will probably be closer to -20% to -30% in April. Stores were only closed about 1/3 of the month of March.

As I mentioned in my economic updates, this recession will be far deeper than any recession since the Great Depression and will take a long time to recover from.

By Christopher Schwarz, ago

Outlined Rules by Gov. Newson Mean Long-term Economic Pain

Today the states of California, Oregon, and Washington outlined the steps necessary for a reopening. In summary, until there is vaccine, there will NOT be even close to a full recovery in these states.

Some of the highlights:

  • Testing needs to be comprehensive.

    We aren’t even close on this point. Testing right now is, to be honest, pathetic. Here are the data.
CA, WA, and OR testing data from covidtracking.com

On average 3 states with 50 million people are doing 10,000 tests per day. This needs to be more like 40-50k per day.

  • Likely no mass social events until there is a vaccine
  • Businesses and schools will need to figure out a way to do social distancing.
  • This means, for example, “you may see servers wearing face masks, menus may be disposable, you may have your temperature taken before entering and there may be half as many tables as before.”
  • I don’t even know how schools can do this. Classroom space is fixed. If they are usually full now, you only have 1/2 capacity at best.

The bottom line is we will have a very long and slow recovery for the rest of the year.

By Christopher Schwarz, ago