NEW YORK — Retail sales in the United States held steady in April, but were below expectations for a 0.2 percent gain, following an upwardly revised 1.1 percent (was 0.9 percent) increase in March, RBC Economics reported today.
A 0.4 percent decline at motor vehicle dealerships in April was slightly smaller than was implied by an earlier-reported 3.5 percent dip in the pace of unit auto sales in the month; however, excluding the auto sector, sales rose by just 0.1 percent, which was weaker than expectations for a 0.5 percent gain.
The modest increase in nominal ex-auto sales was despite a 0.7 percent drop in gasoline station receipts that mainly reflected lower gasoline prices in the month. A 0.7 percent increase in food services sales provided offset, following an upwardly revised 0.8 percent (was 0.4 percent) gain in March. However, retail sales excluding the auto, gasoline station, and building material components, which do not directly enter into the Bureau of Economic Analysis’ (BEA) quarterly consumer spending estimates, were unchanged in April following an upwardly revised 0.5 percent (was 0.4 percent) increase in March but a downwardly revised 0.4 percent decline (was -0.3 percent) in February.
“Although weaker than expected, the flat reading on control (excluding auto, gasoline, and building material) sales in April followed a solid gain in March to leave the measure up by an annualized 0.9 percent in the latest month relative to its first-quarter 2015 average,” said Nathan Janzen, senior economist. “Following a 0.6 percent dip in the measure in the first quarter, the reading still points to some strengthening in real consumer spending in the second quarter from the 1.9 percent gain in the first quarter.
“The monthly data to date point to some downside risk to our forecast for a 3.2 percent second-quarter increase and in turn point to some early downside risk to our forecast that GDP rose to 3.7 percent in the second quarter,” he added. “We still expect activity to rebound solidly in the quarter after severe winter weather and disruptions associated with the west coast port strike combined to limit GDP growth in the first quarter to just a 0.2 percent rate.
“We continue to expect consumer spending will be a solid contributor to overall GDP growth during 2015, reflecting the still-solid pace of improvement in labor markets, low interest rates, and increased purchasing power resulting from sharp declines in gasoline prices in the last year,” said Janzen.
SOURCE: RBC Economics press release