Sunday, February 25, 2024
HomeFinanceRetail sales rebound in April and point to steady economy

Retail sales rebound in April and point to steady economy

The numbers: Sales at U.S. retailers rebounded 0.4% in April largely because of strong demand for new autos and higher consumer spending online, offering a respite from a broad slowdown in consumer spending.

Sales had been forecast to rise 0.8%, based on a Wall Street Journal poll of economists.

Retail sales are a big part of consumer spending and offer clues about the strength of the economy. Before April’s increase, retail sales had fallen in four of the prior five months.

Retail sales rose a somewhat stronger 0.6% in April if auto dealers and gas stations are excluded. Car and gasoline purchases exaggerate overall retail spending.

Key details: Sales of new vehicles and auto parts, an up-and-down category, rose 0.4% last month.

Receipts at gas stations, on the other hand, fell 0.8%. They were expected to rise due to an increase in oil prices last month.

Retail sales increased 0.6% if car dealers and gas stations are set aside, giving a better idea of consumer demand.

Sales rose at Internet retailers, general stores and home centers such as Home Depot

and Lowe’s

One category economists watch closely is bars and restaurants, the only service sector in the retail report. Restaurant receipts rose 0.6% and increased for the second month in a row

Restaurant sales tend to rise when the economy is healthy and Americans feel secure in their jobs. Sales slack off during times of economic distress.

Big picture: The increase in retail sales is unlikely to mark the start of a sustained uptrend. Rising interest rates orchestrated by the Federal Reserve to tame high inflation have slowed the economy and curbed consumer appetites for big-ticket items.

Yet a super-strong labor market and rising incomes probably will keep retail consumer spending aloft barring a recession. Americans are still spending plenty of money on services such as travel and recreation.

Market reaction: The Dow Jones Industrial Average

and S&P 500

were set to open lower in Tuesday trades.

This story originally appeared on Marketwatch

- Advertisment -

Most Popular

Recent Comments