So much for the spring upswing analysts had been expecting: Retail sales were essentially stagnant in April, despite the anticipated boost from warmer weather and a later Easter holiday.
A gauge from the Commerce Department inched up 0.1% last month from the month before. When the more volatile measure of motor vehicle and parts receipts was stripped out of the equation, the retail sales tally was flat.
Analysts had expected a 0.4% increase.
“After two months of back-to-back strength, the consumer appears to have lost momentum as we head into the second quarter,” said Lindsey Piegza, chief economist at Sterne Agee, in a note to clients.
Americans seem to have quickly satisfied their pent-up demands for goods after a harsh winter in which the average family spent an extra $600 to stay warm while also setting aside funds to enroll in healthcare.
“It certainly undermines some of the optimism out in the marketplace,” Piegza said of the Tuesday report.
Retail sales are considered a bellwether of consumer spending, which makes up two-thirds or more of the U.S. economy. In April, the measure was up 4% from the same month in 2013.
Some sectors showed strength month to month. Clothing store sales rose 1.2%, while receipts at building materials and garden equipment vendors swelled 0.4% -- a typical bump as higher temperatures encourage more home improvement projects.
But “the transition towards warmer weather remained choppy,” according to a report last week from Euclid, which analyzes in-store metrics. Shopper traffic slumped 10% in April from the year before, while repeat visits also declined, the group said.
The government’s figures on Tuesday showed a deep 2.3% slide in sales at electronics and appliance stores from March. Furniture merchants suffered a 0.6% slip. Non-store retailers, which include the recently strong e-commerce segment, dropped 0.9%.
Sales at gas stations were up 0.8%, suggesting that consumers were paying more at the pump as fuel prices steadily inch up.
The report, however, showed that retail sales overall had surged 1.5% in March from a previously reported 1.2% increase, marking the largest escalation since March 2010.
Also Tuesday, the International Council of Shopping Centers said that spending during the week ended May 10 was down 0.1% from the previous week but surged 3.9% from a year earlier – the strongest gain in nearly a year.
“Temperatures turned milder in some parts of the country which helped drive seasonal demand — especially in the South and ahead of Mother’s Day,” said Michael Niemira, the group’s chief economist.Copyright © 2014, Los Angeles Times
7:11 a.m.: This post has been updated with a reaction by an economist.