Government gives consumers Free Money, retail sales spike. Free Money peters out, retail sales sag. Welcome to the new normal.
By Wolf Richter for WOLF STREET.
The $1,400 stimmies that started flowing in March were still flowing voluminously in April, and the last big waves are still flowing in May, and then they’ll peter out. For retailers, this petering out will be a moment of truth. But in April, those stimmies kept coming and kept getting spent.
Retail sales in April maintained the peak of the epic WTF spike of March, as Americans spent the same epic record pile of money of $620 billion (seasonally adjusted) at their favorite brick & mortar retailers, online, and at restaurants and bars, the Census Bureau reported today.
Price spikes in motor vehicles and price increases in other segments had a lot do with it. Total retail sales were up 20.4% from April 2019. This gives the epic WTF chart of the year a flat top, and a drop in May, when the stimmies peter out, is practically guaranteed:
New & used auto dealers and parts stores: Sales rose another 2.9% in April from March, after having spiked by 17% in March from February, to a WTF record of $139 billion, seasonally adjusted.
This comes after months of tight inventories made worse by the chip shortage fiasco that is now gripping the automakers and crimping the supply of new vehicles for rental fleets that are then not selling their remaining older vehicles at auction, which crimps the supply for used…