A new report from the U.S. Census Bureau showed that advance estimates of retail and food services sales in April totaled $497.6 billion. That was a 0.3 percent increase from March’s upward-revised print, the second monthly gain in a row, and in line with economists’ forecasts. “Core” retail sales, which exclude the volatile automobile and gasoline components, also increased by 0.3 percent in April, slightly worse than expected but again the prior month’s figure was revised higher.
More importantly, the sales gains were broad-based last month, with 9 of the 13 major retail categories showing increases in April. Notable strength was seen at furniture merchants, building-materials outlets, online retailers (Amazon), and department stores, including the largest monthly increase in sales at apparel stores since March of last year. Altogether, this was an encouraging report that suggests consumer spending is trying to rebound following Q1’s post-holiday slump. Higher gasoline prices could be a problem down the road but for now larger tax refunds and rising wages have helped offset this potential headwind.
Sources: Econoday, U.S. Census Bureau, Bloomberg, FRBSLPost author: Charles Couch