Record drop in retail sales triggers slump in markets

Markets opened down Friday morning on news that retail sales in April fell a record 16.4 percent, breaking the March record of an 8.3 percent decline.

The Dow Jones Industrial Average was down 225 points, or 1 percent, in early trading, as the S&P 500 fell 31 points, or 1.1 percent.

The precipitous drop in retail sales, which accounts for both online and in-store shopping, was worse than economists had expected, and is only the most recent in a spate of horrifying economic news.

On Thursday, the Labor Department reported that nearly 3 million people applied for initial unemployment last week, marking the eighth straight week of multi-million new claims. The seasonally adjusted estimate since the pandemic began topped 36 million.

Goldman Sachs projected that the unemployment rate would peak at 25 percent, near the highest levels seen in the Great Depression nearly a century ago.

A survey from the Federal Reserve found that a fifth of workers had no paid leave available if they got sick, and that 39 percent of those earning under $40,000 a year had lost their jobs in April.

But economists are also hoping that once some states open for business, workers will come back, sales will start to rise again, and the economy can start churning again, albeit at a confined clip.