U.S. Retail Sales Rise Slightly, Far Below Expectations

WASHINGTON — Retail sales barely rose in April, tempering hopes of a sharp acceleration in economic growth in the second quarter.

The Commerce Department said on Tuesday that retail sales edged up 0.1 percent last month, held back by declines in receipts at furniture, electronic and appliance stores, as well as 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 and reflected pent-up demand after a brutally cold winter.

“You really had a spectacular March,” said Guy Berger, an economist at RBS in Stamford, Conn. “You are now having an April hangover. The reality of the economy is decent but not great.”

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

Data like employment, as well as manufacturing and services industries surveys, had suggested the economy regained strength early in the second quarter. Growth was held down to a 0.1 percent annual rate in the first quarter by bad weather and a slow pace of restocking by businesses.

However, growth will probably be revised down to show a contraction. A second report from the Commerce Department showed that retail inventories excluding automobile stocks barely rose in March.

The government had assumed a big increase in these stocks when it made its advance growth estimates last month for gross domestic product. March trade, construction spending and factory inventory data, which the government did not have in hand for the G.D.P. estimate, have also suggested downward revisions to output.

In April, a gauge of consumer spending slipped and economists said the economy’s weak performance at the start of the year had probably made households more careful about spending.

“It’s possible that consumers are being a bit more cautious in their spending habits as they await confirmation that the economy is, in fact, poised to reaccelerate,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Mich.

So-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of the G.D.P., dipped 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.

In a separate report, the Labor Department said import prices fell 0.4 percent last month after rising 0.4 percent in March. Economists had forecast prices to be up 0.3 percent last month. In the 12 months through April, import prices fell 0.3 percent.

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 and drinking spots dropped 0.9 percent.

Sales at nonstore retailers, which include online sales, fell 0.9 percent.

Receipts at building materials and garden equipment stores rose 0.4 percent, however, and 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:

www.nytimes.com