Retail Sales, Employment, and the COVID-19 Pandemic
This short video shows the impact of the COVID-19 pandemic on retail sales and employment levels.
- The FRED Blog: Eating out or staying in? FRED says bon appétit
- Chart: Advance Retail Sales: Food Services and Drinking Places; Advance Retail Sales: Food and Beverage Stores; and "CPIAUCSL" (Consumer Price Index for All Urban Consumers: All Items in U.S. City Average) to adjust sales figures for cost of living.
- The FRED Blog: The largest changes in payroll employment
- Chart: To show the monthly percentage change in payroll employment across all service-providing industries since 1939.
- Chart: The unemployment rate "UNRATE," which represents the number of unemployed as a percentage of the labor force.
- Related: The Effects of COVID-19 on Unemployment Insurance Claims
Federal Reserve Response: Federal Funds Rate
- The FRED Blog: Unexpected changes to the benchmark U.S. interest rate
- Chart: The federal funds rate target range (upper and lower limits) and the effective federal funds rate. The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. The graph also shows interest on reserves, which is determined by the Board of Governors and gives the Fed an additional tool for conducting monetary policy.
Federal Reserve Response: Holdings of Long-term Securities
- The FRED Blog: Fourth large-scale asset purchases program: A new hope
- Chart: To show purchases of Treasury securities and mortgage-backed securities.
The Covid-19 pandemic has had a major economic impact. The Federal Reserve System responded to it using conventional and unconventional monetary policy tools.
Let’s FRED that.
Social distancing has changed spending habits. For example, in this graph you can see a fairly steady growth of retail sales at restaurants and bars (the black line) catching up to retail sales at food and beverage stores (the red line).
Starting in March, those trends changed: consumer demand switched—almost dollar for dollar.
Employers shed an unprecedented number of jobs.
Only the American Telephone & Telegraph Co. union workers’ strike of August 1983 (the blue bars at the left of the graph) is comparable in magnitude.
Because there are fewer persons employed, the unemployment rate tripled between February and April.
The Federal Reserve responded by lowering interest rates to make borrowing by businesses and households cheaper.
The Federal Reserve also increased its holdings of long-term securities to promote the stability of the financial system itself.
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