© Reuters. FILE PHOTO: A shopper makes a purchase at the J.C. Penney department store in North Riverside(Reuters) – U.S. retail sales increased moderately in April as rising gasoline prices weighed on discretionary spending, but consumer spending appeared on track to accelerate after slowing sharply in the first quarter.
The Commerce Department said on Tuesday that retail sales rose 0.3 percent last month. Data for March was revised up to show sales surging 0.8 percent instead of the previously reported 0.6 percent rise.
Last month’s increase in retail sales was in line with economists’ expectations. Retail sales in April increased 4.7 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.4 percent last month after an upwardly revised 0.5 percent increase in March. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
They were previously reported to have risen 0.4 percent in March. Consumer spending braked sharply in the first quarter, growing at its slowest pace in nearly five years, amid delays in processing tax refunds. Economists also say clean-up efforts in the wake of back-to-back hurricanes in late 2017 had pulled forward spending into the fourth quarter.
A recent increase in gasoline prices, if sustained, could blunt the impact of lower income taxes on consumer spending. Gasoline prices rose almost 17 cents to $2.757 per gallon in April, the highest price since July 2015, according to data from the U.S. Energy Information Administration.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a pedestrian 1.1 percent annualized rate in the first quarter. The economy expanded at a 2.3 percent pace in the January-March period.
In April, auto sales edged up 0.1 percent after accelerating 2.1 percent in March. Receipts at service stations jumped 0.8 percent, reflecting higher gasoline prices.
With prices at the pump rising, sales at restaurants and bars fell 0.3 percent, the largest drop since February 2017. Americans also cut back on spending on hobbies. Receipts at sporting goods and hobby stores dipped 0.1 percent last month, matching March’s drop.
Sales at furniture stores rose 0.8 percent after surging 1.4 percent in March. Receipts at electronics and appliance stores slipped 0.1 percent while sales at building material stores rose 0.4 percent last month.
Receipts at clothing stores shot up 1.4 percent, the biggest increase since March 2017, while sales at online retailers increased 0.6 percent.
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Source: Investing.com
