The Economy May Be On The Mend As Retail Sales Soar And Unemployment Claims Fall
MARY LOUISE KELLY, HOST:
New cars, new clothes and new catcher's mitts - Americans were buying them all last month. Retail sales hit a home run in March after a swing and a miss the month before. The sales boom was fueled in part by those $1,400 relief payments that the federal government was sending out last month. Millions of shoppers may also have felt more comfortable going out and spending money after getting a vaccination against COVID-19. NPR's chief economics correspondent Scott Horsley is here. Hi, Scott.
SCOTT HORSLEY, BYLINE: Good to be with you, Mary Louise.
KELLY: It sounds like March was a banner month for retailers, so start there. Just how good was it?
HORSLEY: Yeah. This was the second biggest jump in retail sales on record. The only bigger one was last May, when the country was first coming out of that pandemic lockdown. Sales last month were up by 9.8%. And even though sales were down a little bit in February, when much of the country was hit with severe winter weather, overall, retail sales are now way above their pre-pandemic levels. And it's also interesting to see where people were shopping last month. Clothing stores had a big gain. So did restaurants and sporting goods stores. It feels like spring has finally arrived after a long pandemic winter. Wayne Grantham runs the All Star Sports store in Florence, S.C.
WAYNE GRANTHAM: There was definitely a pent-up demand to get out of the house, whether it was baseball or soccer or hunting or fishing. And across the board, outdoor activities have been well-received.
HORSLEY: Online sales were also up last month but by a comparatively modest 6%. So it looks like after a year of shopping online from home, people were anxious to, you know, go out and kick the tires and actually browse in physical stores.
KELLY: Yeah. Well, so shopping aside, what does all that mean for the broader economy?
HORSLEY: Well, consumer sales are a huge driver for the broader economy, and we got another positive signal about the job market this morning. Last week, new state claims for unemployment fell to their lowest level since the pandemic took hold here. Both restaurants and retailers have been adding jobs to keep up with the increased demand. And Federal Reserve Chairman Jerome Powell told the Economic Club of Washington yesterday he thinks the economy is at an inflection point.
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JEROME POWELL: You see the economy opening. You can see ridership on airplanes going up and people going back to restaurants. I think we are - we're going into a period of faster growth and higher job creation, and that's a good thing.
HORSLEY: A lot of people do have money to spend. In addition to those relief payments that went out, people who've been lucky enough to keep working have saved a lot of money during the past year because they couldn't go out to eat as often or take vacations. So those savings could fuel additional spending as more opportunities for travel and entertainment reopen.
KELLY: This is such a sunny forecast. I know you're going to tell us, though, (laughter) there's storm clouds looming somewhere. What are they?
HORSLEY: You've been through the last year, haven't you? Yeah.
HORSLEY: Even as more people are getting vaccinated, the pandemic is not over. We've seen an 11% rise in new infections over the last couple weeks. A big spike in cases could derail this spending boom. Another much less serious challenge is just keeping up with all that increased demand. You know, there's so many cargo ships parked off the coast of California now, you have to wait a little longer maybe to get that video game you've been looking for. And with more people eating out, you might also have to wait a little longer for a table at your favorite restaurant.
KELLY: Worth the wait. Thank you, Scott.
HORSLEY: You're welcome.
KELLY: NPR's Scott Horsley.
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