Retail sales unexpectedly fell in April as American consumers tightened their purse strings, a month after they helped power the gauge to its biggest rise in 18 months.
Headline retail sales fell 0.2 per cent month-on-month in April, the Commerce Department said on Wednesday. That confounded expectations for a 0.2 per cent gain and followed March’s upwardly revised blockbuster gain of 1.7 per cent.
March’s figure, the biggest monthly increase since September 2017, were lifted by tax refunds and would have been hard to top. As such, despite the pullback in April retail sales, the report is unlikely to be enough to alter the view in markets that the US economy is holding up better than expected despite the ongoing uncertainty over China trade talks and global economic growth.
Underscoring the resilience, April retail sales were actually up 3.1 per cent compared to the prior year period.
“The decline in US retail sales during April was relatively modest given the strong growth seen in March,” said James Smith, developed markets economist at ING. “With wage growth grinding higher, we think the outlook for consumers looks fairly bright, and is a key reason why we aren’t expecting a Fed rate cut in the near future.”
So-called control retail sales, which strip out volatile items like petrol and building materials, among others, fell 0.2 per cent, compared to an upwardly revised 1.1 per cent increase (previously 1 per cent) in March.