A pickup in USA retail sales last month adds to signs of steady consumer spending that will help propel the economy after a first-quarter slowdown, Commerce Department data showed Friday.
Data issued today by the United States Department of Commerce and the National Retail Federation (NRF) for April retail sales were similar in that they showed mild sequential gains and larger annual gains.
The slowdown in consumer spending over the winter added to the woes of many retailers.
Sales by non-store retailers, electronics and appliance stores, and building materials and supplies dealers saw significant growth. Factor out auto sales, and total retail sales for the month were up 0.3 percent. Compared to April 2016, the clothing and accessories segment was up of 1.7 percent, and general merchandise was up 0.8 percent.
As well as retail sales data, investors were also digesting the latest U.S. inflation figures. Sales at nonstore retailers increased 1.4% from March, while increasing 11.9% year-over-year. Gauges of consumer and business confidence remain high following last year's presidential election; the University of Michigan's index of consumer sentiment was up 9% in April compared with a year earlier.
"As much as we do see some forward pressures on household finances, we also see positives from continued low gas prices, relatively full employment, and some modest gains in wages", Saunders said.
Friday's report excluded consumer spending on most services, including medical care and housing.
With consumer spending accounting for around two-thirds of all economic activity, that commensurate growth, or projected growth, is contingent on consumers being able to change behavior, or, in other words, consistently spend more.
Excluding sales of motor vehicles and auto parts, sales rose 0.3% in April from the prior month; economists had expected a 0.5% rise. Fundamentally, it remains an open question whether the improvements in April will prove to be a bellwether of a rebound in consumer spending.