Newly released economic data shows the US economy is in a terrible state and may not rebound quickly even when the devastating lockdowns imposed to stop the coronavirus pandemic are lifted.
Data tracking industrial production and the vital retail sector released Friday showed record declines in April, the first full month of lockdowns to stop the spread of COVID-19 virus that has killed nearly 86,000 people and caused around 36.5 million people to lose their jobs in the world's largest economy.
"The combination of elevated unemployment, depressed income, frail consumer confidence will continue to weigh on consumer's appetite for spending."Consumer spending has been a crucial part of the US economy, and the Commerce Department reported retail sales sunk by 16.4 percent in April, the largest one-month fall on record.
Non-store retailers, such as those doing business online, were one of the only bright spots, growing by 8.4 percent. On the other end of the supply chain, the Federal Reserve's industrial production index dropped a record 11.2 percent in April, the largest monthly fall in its 101-year history. Meanwhile, a nationwide industry poll showed majority of US manufacturing and services firms expect revenues to decline sharply this year amid the lockdowns, pushing any recovery back to 2021.
The changing nature of business, given social-distancing requirements, uncertain consumer sentiment and jobs outlook all will weigh on the sector, he said.
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