The COVID-19 pandemic has created both a far-reaching public health crisis and an economic crisis in the United States. It has disrupted our way of life, caused significant death and disease, and created a global economic slowdown.
The pandemic has shocked the economy, impacting consumer demand, supplies, and finances. Voluntary social distancing and lockdowns that took effect in March prompted a severe economic downturn.
The pandemic has led to dramatic swings in household spending. Retail sales, which primarily tracks sales of consumer goods, declined 8.7% from February to March 2020, the largest month-to-month decrease since the Census Bureau started tracking the data. Although some areas (grocery stores, pharmacies, and non-store retailers) saw increases in demand as lockdown measures began, others (clothing stores, furniture and appliances stores, food services and drinking places, sporting and hobby stores, and gasoline stations) saw declines.
In early May, as some states lifted social distancing restrictions, sales began to recover in most goods sectors. Overall, U.S. retail sales increased 17.7% from April to May, the largest monthly jump on record, recouping 63% of March and April’s losses. Growth in retail sales continued through the summer; by August, retail sales were 2.6% above their August 2019 level.
The accompanying graph shows the percent change in real advance retail and food sales from the peak of a business cycle during recessions between 1980 and 2020. Major drops and increases throughout the year have also been felt in the pallet sector as consumer spending impacted pallet demand.
The pandemic also has damaged the nation’s industrial production (output in the manufacturing, mining, and utility sectors). U.S. industrial production dropped sharply in March and since then only has partially rebounded. The decline poses a host of challenges for the manufacturing sector, which employs nearly 13 million workers. Most of those manufacturing jobs cannot be performed remotely, which has left a major drag on those workers. Also, the manufacturing sector is a major buyer of specialty pallets, and some heavy industrial markets are still struggling to recover.
