US retail sales for April hint at slower spending pace
By Lucia Mutikani, ReutersWASHINGTON--Sales at U.S. retailers barely rose in April as the boost from an unseasonably warm winter faded, pointing to some loss of momentum in consumer spending early in the second quarter.
May 17, 2012, 12:18 am TWN
However, the Commerce Department report contained signs of underlying firmness in demand. Other economic data on Tuesday showed a rebound in New York state manufacturing this month and U.S. homebuilder sentiment at a five-year high.
Taken together, the reports calmed concerns the economy was stalling.
In addition, retreating gasoline prices, which put a lid on broader inflation pressures last month, should free money for discretionary spending by households in the months ahead.
“The economy continues to grow at a decent clip, but there are still a lot of risks coming from overseas,” said Omair Sharif, an economist at RBS in Stamford, Connecticut.
Retail sales edged up 0.1 percent in April, held back by a decline in receipts from building materials and clothing stores. That was the smallest gain since December.
Manufacturing remained resilient, with a gauge of factory activity in New York state bouncing higher this month as new orders and shipments rose.
The New York Federal Reserve said its Empire State general business conditions index jumped to 17.09 in May from 6.56 in April, outpacing economists' expectations of 8.50.
Separately, the National Association of Home Builders/Wells Fargo Housing Market index rose to 29, the highest reading since May 2007, from 24 in April.
Unusually warm weather pulled forward sales into January and February, resulting in first-quarter consumer spending rising at its fastest clip in more than a year. Consumer spending rose at a 2.9 percent annual rate.
Sales last month were mixed, with building materials and gardening equipment receipts falling 1.8 percent — the largest drop since January last year — after surging 2.7 percent in March.
Home Depot Inc also fell victim to the weather in April. The world's largest home improvement chain reported weaker-than-expected quarterly sales on Tuesday after demand slowed last month after earlier strength.
The payback from the warm weather was also evident in clothing stores sales, which dropped 0.7 percent after dipping 0.1 percent in March.
Clothing sales also were probably affected by an early Easter holiday, which brought forward spring purchases.
Elsewhere in the report, auto sales increased 0.5 percent after rising 0.2 percent in March. Excluding autos, sales ticked up 0.1 percent after advancing 0.8 percent the prior month.
Sales at gasoline stations fell 0.3 percent as prices at the gasoline pump retreated from recent highs around US$4 a gallon. Sales had increased 1.0 percent the prior month.
The economy grew at a 2.2-percent rate in the first quarter but could be revised a bit lower as data on restocking by businesses was not as strong in March as the government had assumed when it published its initial GDP estimate last month.