Retail sales are soft in April; inflation eases
Add slowing retail sales to the story of the payback for the warm winter weather.
The Commerce Department said Tuesday that retail spending in April rose a tiny 0.1% from the previous month, seasonally adjusted. Details of the report made clear that the unusually mild winter had pulled some spending forward — resulting in a spring correction, as was also seen in job growth last month.
A separate government report showed the consumer price index, after three months of increases, unchanged in April because of lower fuel costs. The annual inflation rate for all items edged down to 2.3% last month from 2.6% in March.
Retail sales were fairly strong in the first quarter, but spending at building supply businesses sank 1.8% last month from March. Department stores fell back almost as much. Sales at clothing stores dropped 0.7%. And with fuel prices down from earlier this year, gasoline station sales fell 0.3% in April after three straight months of sharp gains.
There were offsetting pockets of strength. Non-store retailers rolled along in April, their sales jumping 1.1%. Furniture stores and dealers of sporting goods also had a solid month, both up 0.7%. Spending for cars and auto parts grew by a more modest 0.5% over the month.
Despite April’s overall slowdown, analysts said Tuesday’s data didn’t suggest a sudden pullback by consumers. Although it’s unclear whether there’s more warm weather payback to come, experts think retail spending is likely to expand in line with job and income growth — that is, at a moderate rate.
Economists at Barclays Bank said Tuesday’s report showed “quite a sharp dichotomy” in sales between things such as cars, clothing, and food and beverages — which are now all well above pre-recession levels — and more discretionary categories such as electronics and department store items.
For electronics stores, one contributing factor in the weaker sales is plunging prices.
The Labor Department’s report on consumer prices showed prices for cars, hospital services and airline fares all rising notably in April from March. Compared with a year earlier, consumers were paying 3.5% more for cars and 5% more for hospital services and clothes last month.
But electronics products are selling for much less. Average consumer prices for televisions, for example, were down nearly 20% in April compared with a year earlier, and prices for personal computers were off 12%.
