Nobody Should Be Surprised by a Drop in Retail Sales

South Coast Plaza, once the mightiest mall west of the Mississippi, has been laid low by the coronavirus lockdown.Kevin Drum

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I confess that I just don’t get this:

U.S. stocks sank at the open Wednesday, dragged down by dismal earnings and retail data that offered new snapshots into the pandemic’s grip on the American economy. The Dow Jones industrial average fell 660 points, or 2.7 percent, shortly before noon and the Standard & Poor’s 500 index and Nasdaq composite also fell sharply. The sell-off followed a blistering report on March retail sales, which plunged 8.7 percent for the worst monthly decline ever.

Of course the March retail sales report was “blistering.” There can’t be a single human being in the country who didn’t expect that. And yet, merely putting an official number on it causes the stock market to plummet.

I suppose we ought to brace for the stock market to be shocked once again next month, when investors pretend not to understand that lockdowns affected only half of March but all of April. This means that April retail sales will be down even more and the market can panic once again. Yeesh.

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