United States: Retail sales pick up pace in April
May 12, 2017
A 0.4% expansion in retail sales in April suggests that economic activity picked up at the start of the second quarter after running aground in Q1. Despite April’s reading falling shy of market projections of a 0.6% increase, a notable 0.3 percentage point revision to March’s headline figure, from a 0.2% decline to a 0.1% increase, more than made up for April’s miss.
The report from the Department of Commerce showed that April’s sales benefited from a return to positive growth in auto sales after three straight months of sizeable contractions. Gas and service station spending also swung back into expansion due to an increase in fuel prices. Building material and garden equipment also posted strong gains in April, underpinned by an upbeat housing market. Although this spells good news for the economy, a wide disparity between survey data and hard data continues to be seen, with retail sales failing to live up to expectations of sky-high consumer confidence and a tight labor market.
On a year-on-year basis, growth in retail sales edged down from a revised 4.8% in March (previously reported: +5.2% yoy) to 4.5% in April, the lowest reading since December. Compared to the same month last year, sales at department stores continued to decline in March (-3.7%), while sales at non-store retailers—a proxy for e-commerce sales—showed another month of double-digit growth (+11.9%). Non-store retailers continue to thrive as American consumers increasingly migrate away from physical stores to online outlets.
Author: David Ampudia, Economist