Retail Sales Post Weaker-Than-Expected April Increase

May 13, 2014

U.S. retail sales barely rose in April and a gauge of consumer spending slipped, which could temper hopes of a sharp acceleration in economic growth in the second quarter.

The Commerce Department said on Tuesday retail sales edged up 0.1 percent last month, held back by declines in receipts at furniture, electronic and appliance stores, restaurants and bars and online retailers.

Retail sales, which account for a third of consumer spending, rose by a revised 1.5 percent in March.  That was the largest increase since March 2010.

Economists polled by Reuters had forecast sales advancing 0.4 percent last month after a previously reported 1.2 percent surge in March.

Data such as employment, as well as manufacturing and services industries surveys had suggested the economy regained strength early in the second quarter after being weighed down by bad weather and a slow pace of restocking by businesses in the first three months of the year.

But the retail sales report cast a shadow on that upbeat outlook.  So-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product, fell 0.1 percent in April.

That followed a revised 1.3 percent advance in March.

Core retail sales had previously been reported to have risen 0.8 percent in March.

Last month, retail sales were restrained by a 2.3 percent drop in receipts at electronics and appliance stores.  Sales at furniture stores fell 0.6 percent, while receipts at food services and drinking places dropped 0.9 percent.

Sales at non-store retailers, which include online sales, fell 0.9 percent.

However, receipts at building materials and garden equipment stores rose 0.4 percent.  Sales at auto dealerships increased 0.6 percent.  There were also increases in sales at gasoline stations, reflecting higher pump prices.

Excluding gasoline and autos, retail sales fell 0.1 percent.

Receipts at clothing stores rose 1.2 percent.  There were also gains in receipts at sporting goods shops.

Source: Fox Business