Consumer spending index and data on retail sales reporting. (Photo: Reuters)
The Commerce Department reported Wednesday that retail sales were flat in April, though the latest report ends three consecutive months of declining sales.
The reading missed economists’ expectations for a gain of 0.2 percent found in a Reuters poll. Excluding auto sales, retails sales rose by just 0.1 percent, which was still far below forecasts for a 0.5 percent gain.
U.S. households cut back on purchases of automobiles and other big-ticket items, further indicating the economy is struggling even after the first quarter. The government initially reported that the U.S. economy barely grew by 0.2 percent in the first quarter, but they were off on their trade deficit estimate. The U.S. trade deficit ballooned in March, suggesting downward revisions that will reflect the economy in contraction.
The government will release its GDP revision later this month.
However, the Commerce Department revised retail sales for the month of March up to show a 1.1 percent gain, rather than the previously reported decline year-over-year.
Retail sales excluding automobiles, gasoline, building materials and food services were all unchanged after an upwardly revised 0.5 percent tick up in March. The so-called core retail sales, which were expected to rise by 0.5 percent in April, correspond most closely with the consumer spending component of gross domestic product.
Weak retail sales have become a trend despite lower gasoline prices, as American consumers continue to either save much of the money from the cheaper gasoline or put it toward rising health care costs.
Retail sales last month were weighed down by a 0.4 percent decline at auto dealerships, while sales at service stations dropped off by 0.7 percent. Sales at electronic and appliance stores also fell by 0.4 percent, while receipts at furniture stores shed 0.9 percent.
On the other hand, receipts at clothing stores were up 0.2 percent, likely a result of Easter holiday discounts.
Receipts at online stores increased 0.8 percent, as did sales at sporting goods stores. Sales of building materials and garden equipment rose 0.3 percent. Sales at restaurants and bars increased 0.7 percent.
