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Early Easter, Bad Weather Blamed for Retail Sales Dip

Associated Press

Retail sales fell 0.6% in April, the first setback in six months, with the decline blamed on an early Easter, bad weather and a bigger federal tax bite for some people.

The Commerce Department said consumers spent a seasonally adjusted $131.6 billion at retail stores last month, a drop of $815 million from the revised March figure.

Sales had not fallen since a 0.8% setback last October, but economists said they were not particularly concerned by the weakness, especially since sales in March were revised upward to show an increase of 1.7%. That was the fastest sales advance since last August and almost twice the originally estimated 0.8% gain for the month.

Both the big jump in March sales and the April decline were blamed on the fact that Easter occurred on April 3 this year, meaning that consumers did their spring shopping in March, siphoning off sales that would normally have occurred last month.

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“The April retail sales figure is very misleading because of Easter. Consumer spending is still holding up well,” said Allen Sinai, chief economist of Boston Co.

Analysts said other factors that played a role in the April decline were higher tax bills some Americans faced at filing time this year and unseasonably cold weather in some parts of the country that discouraged sales of such items as garden equipment.

Tax Bills Cited

They noted in particular that sales at restaurants were down 1.6%, while sales at furniture stores were off 0.2%.

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“Some people did get shocked by the new tax law. They may have filled out their tax forms and decided they couldn’t afford to eat out for the rest of the month,” said David Wyss, an economist with Data Resources Inc.

Tom Megan, an economist with Evans Economics, a Washington forecasting firm, said he was not concerned by the April sales dip because with unemployment now at a 14-year low of 5.4%, consumers are confident about the future.

“With employment and incomes still growing, we expect consumers will keep spending,” he said.

Total economic activity, as measured by the gross national product, rose at an annual rate of 2.3% in the first three months of the year.

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