‘Too Soon To Say How Quickly The Nation’s Economy Will Recover:’ NRF Chief Economist
The National Retail Federation Chief Economist Jack Kleinhenz said it was too early to say how quickly or smoothly the U.S. economy would stage a recovery following the “sizable disruptions” due to the coronavirus pandemic.
However, he noted that the reopening of businesses and the resumption of economic activity is a significant step forward.
Kleinhenz’s remarks came in the June issue of NRF’s Monthly Economic Review, which said the U.S. economy changed course almost overnight from the longest expansion on record to an historic economic slump with sky-high unemployment, due to the coronavirus-induced shutdowns.
Kleinhenz noted that the record plunge in U.S. employment, gross domestic product, retail sales and other indicators were “not comparable to anything” in economic history.
Data from the Commerce Department in late May showed that U.S. GDP fell more than the flash estimate in the first quarter, reflecting the impact of the economic shutdown due to the coronavirus crisis. The real GDP decreased at an annual rate of 5.0 percent in the first quarter, compared to the previously reported 4.8 percent drop.
Retail sales in the U.S. plunged by even more than expected in the month of April, according to a report released by the Commerce Department in mid-May. Retail sales cratered by a record 16.4 percent in April, after tumbling by a revised 8.3 percent in March.
However, Kleinhenz said he welcomed three new weekly studies being produced by the U.S. Census Bureau – the Household Pulse Survey, the Small Business Pulse Survey and a weekly version of the Business Formation Statistics report. These weekly surveys are important snapshots of how individuals and businesses are weathering the current crisis.
The first two surveys showed that households have witnessed reductions in income and most businesses do not anticipate the resumption of full operations for the next six months.
The third report showed that despite the pandemic, new businesses are being formed. Nearly 9,000 applications for companies planning to hire workers were filed in a single week in mid-May alone.
Meanwhile, another report from the Conference Board and labor market analytics company Burning Glass Technologies found that online help-wanted ads dropped 60 percent from February as of mid-April. Since then, the downward trend has started to reverse and the number of ads is down only 40 percent.
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