Total sales increased 0.1% in April to $419 billion from March; sales were 3.7% higher than April 2012. That beat the 0.4% decline that economists had expected and was even better considering the March’s decline of 0.4% was revised downward to a 0.5% decrease.
Moreover, so-called core retail sales, which gas, autos and building supplies, increased 0.5%.
In its April retail sales report, the National Retail Federation (NRF) said April retail sales (excluding gas stations, autos and restaurants) rose 0.6% seasonally adjusted from March and increased 3.9% unadjusted compared to April 2012.
“In the face of higher taxes and sequester, consumers provided the economy a bit of a reprieve this month,” NRF CEO Matthew Shay said. “Despite colder spring weather and an early Easter, consumers shopped in April, demonstrating an inherent resiliency even as the economy faces serious headwinds, including stagnant job and wage growth.”
Slowdown Though in Second Quarter?
Economists pointed to falling gas prices (down an average 14 cents a gallon) and gradual improvement on the employment front as some impetus for consumers to spend. Last week, a dozen major retailers reported comparable store sales for April that were generally up but less so than analysts expected.
Of the 13 major categories tracked by the Commerce Department, nine of them showed increases.
The biggest gain was in clothing and accessories sales which rose 1.2% from March and were 5.7% higher than April 2012. General merchandise retailers posted a 1% gain from March while department stores were up 0.3%. Nonstore retailers, which include e-commerce, had a 1.4% gain (15.4% higher than April 2012).
“Today’s retail sales data is encouraging news,” said NRF Chief Economist Jack Kleinhenz said. “However positive, retail sales and consumer spending in April may not necessarily translate into a stronger or healthier second quarter. NRF continues to forecast moderate sales growth for the year.”
The Commerce Department reported that February to April total sales—roughly first quarter for most businesses—was up 3.7% compared to the same period a year ago.
“Consumers are staying active and providing support to the economy,” said Michael Moran, chief economist at Daiwa Capital Markets America. “We will see a slowdown this quarter, but it won’t be dramatic. There will be some damping of spending due to the payroll tax, but it will be mild.”