United States: Retail sales rebound in April
May 13, 2016
Nominal retail sales surged 1.3% in April over the previous month. The result, which contrasted a 0.3% decrease observed in March and overshot the 0.8% rise the markets had expected, marked the fastest increase in 13 months. Retail sales are a good indicator of the evolution of consumer spending, a key part of economic growth in the United States, as it accounts for over two thirds of overall GDP.
The surge in April was a broad-based increase. The report from the Department of Commerce showed a decent increase in sales of department stores and in sales of non-department stores. Moreover, the boost to sales in April reflected higher energy prices, which increased the value of gasoline at the pump. Analysts suggests that the notable increase in retail sales in April was partly the result of higher wages
The closely-watched retail sales index that excludes autos, car parts and products sold in gas stations also showed a healthy increase in April. Core retail sales increased 0.6% over the previous month, which came in above the revised 0.2% rise tallied in March (previously reported: +0.1% mom).
On an annual basis, retail sales expanded notably in April and gained part of the ground lost in March. Sales accelerated from a 1.7% increase in March to a 3.0% expansion in April.
Author: Ricardo Aceves, Senior Economist