Retail sales plunged record 16.4% in April

Yahoo Finance's Brian Sozzi, Alexis Christoforous, and Heidi Chung break down the April retail sales.

Video Transcript

BRIAN SOZZI: Welcome back to "The First Trade." April retail sales fell a record amount, 16.4%, as Americans cut back tremendously on spending amid the coronavirus pandemic. Heidi Chung is back with us with the details of that report. Heidi?

HEIDI CHUNG: Hey, Brian. Yeah, US consumer activity taking another massive blow in April, as a lot of Americans unfortunately are quarantined in their homes, a lot of layoffs and furloughs also impacting the US economy here. Data from the US Commerce Department this morning showed that headline retail sales plunged a record 16.4% in April. Economists were expecting a 12% drop during the month.

Core retail sales, which, of course, excludes the volatile auto and gas component, is falling 16.2%, which was much worse than the 7.6% estimated decline. Now this compares to retail sales drop of 8.4%, and core retail sales decline of 2.8% in March.

Now breaking down consumer activity here by category-- clothing stores saw the biggest sales decline, of 78.8% in April, followed by sales at electronics stores tumbling 60.6%. Furniture store sales falling 58.7% during the month. Sporting goods stores plunging [? 8%. ?]

Spending at restaurants and bars plummeting 29.5%. Department stores saw sales dip 28.9%. Auto and auto parts sales decreased 12.4%. Gas spending falling 28.8%. Now after seeing an increase in spending in March, sales at grocery stores sank 13.2% in the month.

But one bright spot in the report-- online sales increasing at 8.4% in April. Consumer spending though, of course, accounts for 70% of the economy. And we're already starting to see economists revise their Q2 GDP expectations here.

But a lot of economists on the flip side saying that the low point was likely in April, and we will see improved [INAUDIBLE] in May and June.

BRIAN SOZZI: All right, Heidi Chung, thanks so much.