United States: Retail sales ease in April
Retail sales expanded 0.3% over the previous month in April, down from March’s revised 0.8% rise (previously recorded: +0.6% month-on-month) and in line with market expectations. Despite higher prices at the gas pump, consumer spending was healthy at the beginning of the second quarter, following a weak first quarter.
A breakdown of April’s figure shows mixed performances across sectors. Motor vehicle sales growth almost came to a halt, moderating to 0.1% month-on-month in April from a robust 2.1% expansion in March (previously reported: +2.0% mom). Furniture stores sales also lost momentum and came in at 0.8%, down from a revised 1.4% increase recorded in March (previously reported: +0.7% mom). Businesses that saw sales fall included health and personal care stores (-0.4% mom), food services and drinking places (-0.3% mom), electronics and appliance stores (-0.1% mom) and sporting goods and hobbies stores (-0.1% mom).
Conversely, spending on building materials rebounded in April, and department store sales also recovered, following two consecutive contractions. Clothing and accessories stores likewise experienced a rebound in sales.
Excluding autos and gas, retail sales expanded 0.3% in April, edging down from March’s revised 0.4% print (previously reported: +0.3% mom) and coming in a notch below market expectations of a 0.4% rise.
In annual terms, growth in retail sales moderated to 4.7% in April from an upwardly revised 4.9% recorded in March (previously reported: +4.5% year-on-year). Annual average retail sales growth was steady at 4.4% in April.
Despite weaker sales growth compared to March, the April data suggests retail sales could continue to firm up in the second quarter, supported by rising wages and tax refunds. However, higher gas prices could put a damper on discretionary spending moving forward. Gas prices in April reached record levels compared to the historical average for the month, and increased demand in the summer months, as well as renewed sanctions on Iran, will likely keep prices elevated in the months ahead.