NEW YORK — April retail sales in the United States rose 0.4 percent to build on a 0.1 percent increase (previously reported as -0.2 percent) in March, RBC Economics reported.
Motor vehicle sales rose 0.8 percent, gasoline station sales inched up 0.2 percent, and building material store sales rose 1.2 percent after falling 1.7 percent in March.
‘Control’ sales — those excluding motor vehicles, building materials and gasoline stations — sales rose 0.2 percent following a 0.7 percent jump in March.
“The 0.4 percent gain in April retail sales was only slightly below expectations for a 0.6 percent increase and followed an upwardly revised March gain now reported as up 0.1 percent versus the previous -0.2 percent,” said Nathan Janzen, senior economist.
“On balance, spending over the last two months is in line with the view that the slowing in Q1 real consumer spending growth, to just a 0.3 percent annualized pace, was more the result of ‘normal’ volatility in the data and a weather-related pull-back in utilities consumption than the beginning of a new weaker trend,” he added.
“Strong employment growth, rising wages and consumer confidence, and the still stimulative stance of monetary policy are all pointing to a solid household spending backdrop and the recent data remains in line with our forecast for a 2.8 percent increase in consumer expenditures in Q2 that we expect will support a 2.9 percent increase in GDP following the surprisingly modest 0.7 percent Q1 gain,” Janzen explained.
“Along with continued improvement in labor markets — the unemployment rate fell to a new cycle low of 4.4 percent in April — the data will provide reassurance to the Fed that the fundamental economic backdrop remains strong and, if anything, further increases the odds of another hike to the fed funds target range when monetary policymakers next meet in June,” he predicted.
SOURCE: RBC Economics press release