Retail Sales Surge Most on Record But Number is Misleading


Retail sales surged a greater than expected 17.7% in May but the numbers are well below the pre-pandemic levels.

Those touting a V-Shaped recovery will point to today's Advance Retail Sales Numbers

Advance Retail Sales 

Advance Retail Sales  May 2020

Despite the surge, sales numbers are back to levels seen in late 2015 and early 2016. 

On a year-over-year basis, sales are  6.1% below May 2019. 

Total  sales for the March 2020 through May 2020 period are down 10.5% from the same period a year ago. 

Far Better Than Expected

Still, the sales numbers are far better than expected. 

The Econoday consensus was +7.5% in a range of +2.3% to +12.3%.

5-Month Totals

  • Total: -4.7%
  • Motor Vehicles and Parts: -10.5%
  • Furniture: -18.1%
  • Electronics and Appliances: -19.3%
  • Building Materials: +6.7%
  • Food and Beverage Stores: +13.1%
  • Health & Personal Care: -2.4%
  • Gasoline: -16.7%
  • Clothing: -42.9%
  • Sporting Goods: -9.9%
  • Department Stores: -21.0%
  • Nonstore Retailers: +16.6
  • Food and Drinking Places: -22.3%

The big winners were online shopping (Amazon)  +16.6%, and food stores up 13.1%.

What's Coming?

We had a big surge, but many people are still fearful of crowds. 

It will take a long time for restaurants, gasoline, and other items like hotel, airline traffic that are not in retail sales to recover.  

Stimulus Checks

People got money and spent it, but they also skipped mortgage payments and credit card payments. 

Those Out of a Job

There are still 20 million people out of work.

It is foolish to believe they will all be back working the same number of hours at the end of June. 

Fed vs Kudlow

Expect a Relapse

There are too many things that can go wrong and many of them will. 

The Fed does not expect a V-shaped recovery and neither do I.

Fade Kudlow. These numbers look far better than they are.


Comments (15)
No. 1-8

Mish, you are too downbeat

The Fed'll come out
Bet your fiat dollar
That tomorrow
There'll be Fed!

Just thinkin' about
Clears away the margin
And the losses
'Til there's none!

When I'm stuck with a trade
That's down
And tanking
I just stick out my chin
And grin
And say

The Fed'll come out
So ya gotta hang on
'Til tomorrow
Come what may
Tomorrow, tomorrow!
I love ya tomorrow!
You're always
A day


In addition to the stimulus checks, don't forget about all those unemployment checks that were juiced up an extra $600 per week. For some low wage earners, that netted them more than their paychecks did when working. For those who live from check to check this provided funds for deferred essential purchases, and maybe even enough to buy some 'wants' beyond just the 'needs'.

IIRC, that program terminates at the end of July, and the unemployment checks will drop to the regular, barely subsistence levels.....and August rent and mortgage payments will be due the following week.

Tony Bennett
Tony Bennett

"On a year-over-year basis, sales are 6.1% below May 2019."


Adjusted Total sales

May 2019 ... $516.965 billion
May 2020 ... $485.545 billion


"Stimulus Checks

People got money and spent it, but they also skipped mortgage payments and credit card payments."


Yes. Waayyy too much monkeying around to really extrapolate anything from May numbers. As stimulus wanes? As forbearance ends? As business finds out they might have to give back some of PPP money? As #cancelrent dies? And that is not even factoring a 2nd Wave.

No doubt more stimulus on the way. But House's $3 trillion package DOA (especially extension of $600 / week for those on UE). Republican Senate / Trump are considering a $ trillionish package of tax cuts / infrastructure. In the long run maybe better, but not mainlining like checks to everyone for quick boost.


This is very long game with many issues yet to be resolved.

Anything upward right now is better than straight down.

Tony Bennett
Tony Bennett

Motor vehicle (and parts) went from $70 billion in April to $105 billion in May.

Courtesy of some extreme incentives. Cable ads I saw included 0% for 84 months (Nissan + Chevrolet) and 6 months no payments (Ford).


Well the 1200 bought big screen tvs etc. i assume the up tick in retail sales were two months of putting off shopping. Ie kids shoes etc. see if it falls next month.


Still looks V shaped though!!! Darn I'll have to apologize to Larry Kudlow for ever doubting the man.

I'll just tell him that I've been misled by Mish ;)


My PPP money will be spent after this week, so I will be laying off 1-2 people next week. On the bright side, it's not as many as the 3-4 I would have laid off, had I done it 8 weeks ago. Business is now only down 30-40% instead of 60-70%.

Global Economics