United States: Retail sales growth flatlines in April
Retail sales were relatively unchanged in month-on-month seasonally-adjusted terms in April, after March’s 10.7% surge. The reading reflected a strong decline in sales at sporting goods, general merchandise and clothing stores.
On an annual basis, retail sales rose at a quicker rate of 51.2% in April (March: +29.0% yoy), the best result on record and partly due to a low base effect. Moreover, the trend improved notably, with the annual average growth of retail sales coming in at 8.8% in April, which was up notably from the previous month’s 3.6%.
Commenting on April’s print, Andrew Grantham, senior economist at CIBC Economics, noted:
“The give-and-take nature of today’s release should mean little change to forecasts for Q2 GDP. Goods consumption should still be a positive contributor for at least one more quarter, even if spending eases in the coming months as the boost to incomes from stimulus payments fades. In the second half of the year, however, further growth in overall consumer spending will be tilted towards services as other areas reopen and demand returns. That is, of course, assuming that vaccinations offer protection against any variant-driven increases in Covid-19 case counts later in the year.”