United States: Retail sales stagnate in April
May 13, 2015
In April, growth in retail sales was flat over the previous month, in nominal terms. The print contrasted the 1.1% increase recorded in March and undershot market expectations of a 0.2% increase. March’s result had marked the first positive result after a string of three monthly contractions. However, the poor result in April puts a damper on expectations that the economy will rebound sharply after weak GDP growth in the first quarter. Retail sales are a good indicator for 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. April’s result reflects that an increase in sales at health and personal care stores as well as at sporting goods retailers was offset by falling sales in most other retail categories.
Retail sales excluding cars and gas—a closely watched subcategory of the retail trade index—increased 0.2% in April over the previous month. The result came in below the 0.7% increase recorded in March and fell short of the 0.4% increase expected by the market.
Retail sales rose 0.9% in annual terms in April, which came in below the 1.7% tallied in March. Moreover, the annual trend declined, with annual average growth in retail sales falling from March’s 3.9% to 3.6%.
Author: Carl Kelly, Economist