The report from the Commerce Department on Wednesday came as millions of Americans have been thrown out of work, and strengthened economists’ conviction that the economy is in deep recession. States and local governments have issued “stay-at-home” or “shelter-in-place” orders affecting more than 90% of Americans to curb the spread of COVID-19, the respiratory illness caused by the virus, and abruptly stopping the country.
Retail sales plunged 8.7% last month, the biggest decline since the government started tracking the series in 1992. Data for February was revised slightly up to show retail sales slipping 0.4% instead of falling 0.5% as previously reported.
Economists polled by Reuters had forecast retail sales tumbling 8.0% in March. Compared to March last year, retail sales dropped 6.2%.
The Census Bureau said though “many businesses are operating on a limited capacity or have ceased operations completely,” it had “determined estimates in this release meet publication standards.”
Last month’s decrease in retail sales reflected depressed receipts at car dealerships, with light vehicle sales crashing in March. With millions at home and crude oil prices collapsing amid worries of a deep global recession, gasoline prices have dropped, which weighed on sales at service stations in March.
In addition, the closure of non-essential retailers knocked sales at clothing, sporting goods and furniture stores.
There were also steep declines in receipts at restaurants and bars, which stopped in-person service and moved to take-out and delivery service. Though some businesses, including restaurants, have shifted to online sales, the volumes were insufficient to close the gap from social distancing measures.