Hopes of a retail rebound are surging, but a closer look at sales data suggests a long road to recovery

• The US Commerce Department said retail sales rose a record 17.7% in May from the previous month.
• Retail stocks soared after the report. But predictions of a robust recovery may be premature.
• Retail sales dropped more than 63% for clothing and accessory stores, nearly 26% for department stores, and nearly 30% for electronics and appliance stores in May, compared to the previous year.

Retail stocks surged on Tuesday after the US Commerce Department said retail sales rose a record 17.7% in May from the previous month.

But a closer look at the data suggests a long road to recovery for many retailers.

The 17.7% increase followed a precipitous 14.7% drop in retail sales in April, when most non-essential retailers remained closed due to state and local coronavirus restrictions. April's drop was the steepest in nearly three decades.

Then in May, restrictions eased and nonessential retailers such as Macy's and JCPenney started reopening across the US, allowing for more spending.

The spending increase was also likely helped by federal stimulus checks, which totaled about $1,200 per recipient, as well as the $600 weekly federal boost to unemployment claims that expires in July.

Because of all these variables, it's hard to extrapolate signs of a robust, sustainable recovery by looking solely at month-over-month data.

"A full rebound is well into the future, as fears of new outbreaks remain high and social distancing measures will limit full opening of shops and restaurants," Dr. Kerstin Braun, president of Stenn Group, said in a research note.

Looking instead at year-over-year data, May's sales figures are far less impressive — particularly for clothing, electronics, and department stores.

Total retail sales dropped 6.1% in May compared to the previous year. Sales dropped more than 63% for clothing and accessory stores, nearly 26% for department stores, and nearly 30% for electronics and appliance stores.

Grocery stores, however, saw a 14.4% increase in spending, as many people spent a bigger share of their food budgets on groceries at the expense of restaurants. Sales at restaurants and bars fell 39.4%.