Updated at 2 p.m. ET
Retail spending is in a free fall — nosediving a record 8.7% last month — as more companies continue to furlough workers and stores, malls and restaurants remain shuttered across the country during the coronavirus pandemic.
The March drop was the largest monthly fall since the Commerce Department began tracking retail sales three decades ago. The previous record was a 3.9% drop in November 2008, during the Great Recession.
Americans are still spending a fair amount on food and online deliveries, but not enough to offset the massive drops in shopping for clothes and accessories (down a stunning 50.5%) and furniture (down 26.8%). Spending on autos, parts and gasoline also plummeted.
Economists are warning that April might show an even bigger decline in retail spending as shutdowns continue — and in some areas didn't begin in earnest until late March.
Best Buy, for example, said on Wednesday that it's temporarily furloughing 51,000 workers, including almost all part-time store workers. It's retaining 82% of the chain's hourly full-time store workforce, but many other retailers have fared worse. Macy's and other department stores have temporarily closed and furloughed millions of workers. J.C. Penney is considering filing for bankruptcy, Reuters reported on Tuesday.
Consumer spending is by far the biggest driver of economic activity, which means all eyes will be on U.S. shoppers to see how quickly their spending may bounce back with potential pent-up demand — or what chains and businesses might not survive the pandemic.
"Don't be surprised if the data going forward shows a worsening situation," Jack Kleinhenz, chief economist at the National Retail Federation, said in a statement. "Even if the economy begins to reopen in May, consumer behavior may take a long time to adjust. The road to recovery could be long and slow."
An earlier version of this story incorrectly said that Best Buy is temporarily furloughing 51,000 workers, including almost all part-time workers, and retaining 82% of its workforce. The furloughs apply to almost all part-time store workers and the company is retaining 82% of its hourly full-time store workforce.