The rebound in May had help from stores reopening, shoppers satisfying pent-up demand, and the extra cash they had on hand because of the Cares Act, which sent stimulus checks of up to $1,200 to US consumers. The government had also bolstered unemployment insurance with an additional $600-per-week supplement that’s set to last until the end of July. Still, retail and food service sales for May 2020 were down 6.1% compared to May 2019.

“Comparisons against April have to be taken in context because April was a full month when almost everything that wasn’t deemed ‘essential’ was shut down,” Jack Kleinhenz, chief economist of the trade group National Retail Federation, said in a statement today in response to the May figures. “Spending has improved considerably but it’s still far below where it was a year ago, and while the free fall in consumer confidence is over, unemployment remains high and confidence is still at recession levels.”

The US economy has entered a recession, and Jerome Powell, chairman of the US Federal Reserve, has warned a full recovery isn’t likely until Covid-19 is contained. When that might happen is unclear. As states have reopened their economies, several have seen new cases surge, including Florida, Arizona, and Texas. Oregon, which had begun a phased reopening, has now put that process on pause. California’s reopening continues, but a new rise in cases has officials watching anxiously.

The situation could put a damper on consumer spending, particularly with most Americans having likely used up much or all of their stimulus checks and the additional boost to unemployment insurance soon to end. Meanwhile, many retailers are still struggling, which could lead to further store closures—both at the retailers themselves, but also among stores around them in locations such as malls. Retail is one of the biggest employers in the US, with some 15.9 million workers in 2018, and as more retail workers find themselves without jobs or even wondering if their job is secure, they could cut spending themselves. In a June 11 research note to clients, Credit Suisse said that with “confidence still depressed and the labor market impaired, consumption is likely to take years to recover.”

It’s a precarious situation, so while the news in May was certainly positive, the recovery is far from complete.

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