US retail sales dropped 0.4% in April (seasonally adjusted), the Commerce Department reported Wednesday. The pace of deceleration came as a surprise to most economists who were largely looking for sales to increase 0.1%, or remain unchanged from the previous month. But as the new report shows consumer spending, that normally drives two-thirds of output in the world’s largest economy, remains under pressure due to uncertainty about the economy.
From CB: [A]dvance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $337.7 billion, a decrease of 0.4 percent (±0.5%)* from the previous month and 10.1 percent (±0.7%) below April 2008. Total sales for the February through April 2009 period were down 9.2 percent (±0.5%) from the same period a year ago. The February to March 2009 percent change was revised from -1.2 percent (±0.5%) to -1.3 percent (±0.3%).
Retail trade sales were down 0.4 percent (±0.7%)* from March 2009 and 11.4 percent (±0.7%) below last year. Gasoline stations sales were down 36.4 percent (±1.5%) from April 2008 and motor vehicle and parts dealers sales were down 20.7 percent (±2.3%) from last year.
While today’s retail sales numbers showed a decline in April sales following the recovery earlier this year, let’s keep in mind the drop was strictly concentrated in gas stations and grocery stores sectors – where any weakness is not likely to persist. If we exclude these two categories, overall sales were down only 0.1 percentage point.
In other news: U.S. import prices increased last month by their largest amount in almost one year. Import prices increased 1.6% and export prices increased 0.5%, an important indication that the velocity of money continues to revive. Yes, the hyperinflation subjects comes to mind, but sometimes a fast-growing money supply is not as inflationary as it’s made to be.
Graph: U.S. Census Bureau