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  • - [Man] Retail sales is a measure of purchases at stores,

  • restaurants, and online.

  • This type of spending is a big deal.

  • Although it makes up a relatively small portion of GDP,

  • it's an important driver of economic growth because retail

  • sales affect more than just retailers.

  • They create a ripple effect throughout the economy.

  • That's why analysts and economists are paying close

  • attention to this monthly indicator as a way to gauge

  • whether the economy at large is recovering.

  • Here's how the retail spending ripple effect works.

  • When consumers spend at stores,

  • their stores order more merchandise,

  • which means manufacturers produce more

  • and order more raw materials.

  • So when consumers open their wallets,

  • the economy tends to run smoother.

  • And this type of spending adds up retail sales have been

  • growing for decades except for a short dip

  • around the last recession.

  • Between 1992 and 2018

  • retail sales have almost tripled from $1.8 trillion

  • to 5.3 trillion.

  • This includes auto sales, sales at clothing retailers in

  • general merchandisers like department stores,

  • food and beverage sales, and e-commerce.

  • During the pandemic.

  • Some of these categories have struggled more than others.

  • Auto sales declined sharply as lockdown swept across the

  • country in March and April.

  • - The biggest component retail sales is spending on new cars

  • and also spending on gasoline.

  • Now those two categories have been really hard hit in the

  • coronavirus pandemic because people are not commuting.

  • So they're not spending on gas.

  • And also because there's been so much fluctuation in the

  • labor market, people that are sort of less inclined

  • to buy a new car

  • because they might not necessarily be sure if they're going

  • to have a job next month.

  • - [Man] Many brick and mortar clothing

  • retailers and department stores saw sales all but

  • disappear during coronavirus lockdowns.

  • In April spending on clothing was down

  • nearly 90% from the previous year.

  • Neiman Marcus, JC Penny and J crew,

  • which were all under pressure before the pandemic hit,

  • have recently filed for bankruptcy.

  • - Well, the coronavirus pandemic

  • took a huge hit on retail sales

  • purely because people was stuck at home.

  • You know, they had to stay in their houses

  • due to the due to the

  • spread of the virus.

  • So really the only areas that we saw much spending

  • were on food.

  • - [Man] Sales for food and beverages,

  • haven't been as deeply impacted.

  • While spending at bars and

  • restaurants has gone down,

  • people have been stocking up at grocery stores.

  • - Spending of bars and restaurants has been hit really hard.

  • I mean, a lot of places did manage

  • to continue to provide takeout

  • and curbside deliver and so on.

  • But what we did see was a big bump in March when people were

  • stocking up, you know,

  • they really wanted to fill their shelves in preparation for

  • the shutdowns.

  • - [Man] Spending online however has accelerated.

  • Consumers increased online purchases

  • in April from the same period last year,

  • boosting online retailers by more than 20%.

  • - Well every month that this the, you know,

  • the coronavirus has been on

  • we've seen a greater share of retail sales

  • at non store retailers.

  • Like for instance, amazon.com for many people,

  • the only option that they have

  • to buy certain products is to go online and spend online.

  • - [Man] More recently,

  • there have been signs that retail might be recovering.

  • The retail sector lost almost 2.3 million jobs in April,

  • but added nearly 370,000 back in may.

  • - And the hope is that that will continue as people kind of

  • start to get out and about and to,

  • to recover and to spend more money after the,

  • after the shutdowns or essentially the last phase of the

  • recovery will be people going back into stores, into malls,

  • into enclosed spaces and feeling comfortable.

  • - How confident consumers feel about going out and spending

  • money safely will help determine how quickly retail sales

  • might improve and ripple around the economy.

- [Man] Retail sales is a measure of purchases at stores,

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B2 US WSJ retail spending ripple online april

The Economic Ripple Effect of Retail Sales, Explained WSJ

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    洪子雯 posted on 2020/06/24
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