Retail Sales 0.9% Higher in April

Spending was boosted by inflation and demand.

Retail_Sales_0.9%_Higher_in_April
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Consumer spending was nearly in line with the expectations of Wall Street analysts in April. The Commerce Department reported today that retail spending increased by 0.9 percent in April compared to March, just short of a 1 percent estimate. When not factoring in automobile sales, sales were 0.6 percent higher, slightly better than the 0.4 percent predicted by analysts. 

The metrics don’t factor in inflation, so they reflect sustained spending and inflation that has moved faster than any other time in the U.S. economy over the past 40 years.

The boost in sales was likely driven by a 2.1 percent increase in online sales and a 4 percent rise in miscellaneous retail spending. Restaurants and bar sales also increased by 2 percent last month. The three categories together had larger gains in April than in March. Compared to a year ago at the same time, restaurant and bar sales were 19.8 percent higher due to COVID restrictions and shutdowns in early 2021.

But there was a 2.7 percent decline in gasoline sales due to lower energy prices. Not factoring in gas stations, sales were 1.3 percent higher. Compared to last year, gasoline sales were up by 39.6 percent.

Economist Jeffrey Roach commented, “Retail sales in April show that the consumer is weathering the inflationary headwinds, rising for the fourth consecutive month. Core categories show signs that consumers are likely dipping into savings to offset the decline in real wages. If pricing pressures can moderate enough to relieve some of the pressure on consumers, we expect a rebound in economic growth in Q2.”

March’s spending estimates were also revised to reflect higher gains, from an original estimate of 0.5 percent to 1.4 percent. Ex-auto sales also had a revision for March, from 1.1 percent to 2.1 percent.

Sales on the headline metric were 8.2 percent higher year-over-year. Not including auto sales, the figure was 10.9 percent.

April’s sales report shows that the economy is still growing, even though inflationary pressures are on. Prices were 0.3 percent higher last month. When not factoring in and including energy and food prices, they were 0.6 percent higher.

The consumer price index increased 6.2 percent on core and 8.3 percent on headline on an annualized basis in April.

Meanwhile, the gross domestic product declined by 1.4 percent in the first quarter on an annualized basis. Economists, however, expect that growth will increase for the remaining of 2022.

 

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