US retail sales up solid 0.3 pct. in April in hopeful sign
FILE - In this Nov. 23, 2017, file photo, Jesus Reyes pushes a television down an aisle as he shops at a Black Friday sale at a Best Buy store in Overland Park, Kan. On Tuesday, May 15, 2018, the Commerce Department releases U.S. retail sales data for April. (AP Photo/Charlie Riedel, File)
May 15, 2018 - 8:13 AM
WASHINGTON - U.S. retail sales rose at a solid pace in April, a sign that consumers may be rebounding from weak spending earlier this year and driving stronger economic growth.
Retail sales increased at a 0.3 per cent rate in April, the Commerce Department said Tuesday, down from a 0.8 per cent gain in March, which was revised higher from 0.6 per cent. The spending gains were spread across most retail categories, with especially big gains at furniture and clothing stores.
Consumer spending has rebounded in the past two months after a weak January and February, a trend that could accelerate growth in the April-June quarter.
"Consumption growth is on track for a big rebound in the second quarter, which should push overall GDP growth up to more than 3 per cent," said Michael Pearce, senior U.S. economist at Capital Economics. That would represent an improvement from the January-March quarter when the economy expanded at a 2.3 per cent annual rate.
A strong job market, which is showing early signs of lifting Americans' incomes, could help drive spending gains in the months ahead. Tax cuts have also left most U.S. households with more money to spend, though that extra cash has been eroded in recent weeks by sharply higher gasoline prices. The unemployment rate has reached a 17-year low of 3.9 per cent. And measures of consumer confidence remain mostly healthy, despite higher gas costs and a rocky stock market.
The Commerce Department's retail sales data showed that clothing-store sales, fueled by price cuts, jumped 1.4 per cent. Sales at home and garden stores rose 0.4 per cent. A category that includes online and catalogue sales increased 0.6 per cent.
Consumer spending climbed at a 4 per cent annual rate in the final three months of last year, the sharpest increase in three years. Americans then cut back in January and February before rebounding in March.
Gas station sales rose 0.8 per cent in April, less than some analysts forecast, largely reflecting price increases. Prices at the pump have risen in the past year, lifted mostly by oil price gains. Tuesday's figures suggest that the price increases haven't yet dragged down other spending. But that could change. Analysts expect gas prices to keep rising as the summer driving season gets underway.
The average price for a gallon of gas nationwide reached $2.88 Tuesday, up 17 cents from a month earlier and 54 cents from a year ago, according to AAA.
Retail sales are closely watched by economists because they provide an early read on consumer spending, the principal driver of the U.S. economy. Store purchases account for about one-third of U.S. consumer spending. Spending on services, such as haircuts and mobile phones plans, makes up the remaining two-thirds.
News from © The Associated Press, 2018