Odd Recession: Q2 Retail Trade Profits Surge To Record High
Every recession has unique features, but this is one for the record books (no pun intended). According to the GDP report released today, operating profits for the retail trade sector hit a record high in Q2. BEA said record earnings from large retailers--- Walmart, Amazon, Home Depot---were responsible for the gains. Record profits in retail occurred even when store bankruptcies are the highest since the Great Financial Recession.
The record profits for the retail sector highlights the unusual nature of the recession. That is, the pandemic has hit the consumer service sector unlike most recessions that impacts consumer spending on goods. Spending at many retail stores has actually increased more than normal as spending that would have been spent on services (i.e., travel, recreation and entertainment) has been directed towards goods.