Pickup in US retail sales adds to steady consumer spending

Sales rose in nine of 13 major retail categories

US retail sales rose 0.4 per cent last month after a 0.1 per cent increase in the previous month. Photograph: Saul Loeb/AFP/Getty Images

US retail sales rose 0.4 per cent last month after a 0.1 per cent increase in the previous month. Photograph: Saul Loeb/AFP/Getty Images

 

A pickup in US retail sales last month adds to signs of steady consumer spending that will help propel the economy after a first-quarter slowdown, Commerce Department data showed Friday.

Purchases rose 0.4 per cent after a 0.1 per cent increase the prior month.

Retail control-group sales, which are used to calculate GDP and exclude the categories of food services, auto dealers, building materials outlets and gasoline stations, rose 0.2 per cent after a 0.7 per cent March gain that was the biggest since April 2016.

Sales rose in nine of 13 major retail categories.

Including the revision, the retail figures were close to estimates and show little more than steady demand at the start of the second quarter. The caveat was the smaller-than-expected 0.2 per cent advance in so-called core sales.

While the Commerce Department data capture only a small part of consumer purchases, household spending on services probably has kept up a solid pace amid more seasonal temperatures.

The figures also might be a sign that delayed tax refunds in 2017 are beginning to make their way to Americans’ wallets, providing additional support in the months ahead.

The Commerce data don’t reflect changes in prices, and consumers weathered a spike in gasoline prices in April. Fuel costs have since declined.

“The backdrop is generally favourable for consumers, with an unemployment rate of 4.4 per cent, gradually improving wage pressures, low borrowing costs and high household wealth,” Michelle Meyer and other Bank of America economists wrote in a note before the data.

Purchases at auto dealers and service stations increased 0.7 per cent; industry data showed sales of cars and light trucks rose in April to a 16.8 million pace after March’s 16.5 million rate was the slowest in more than two years.

Retail sales excluding autos rose 0.3 per cent for a second month.

Sales at merchants of electronics and appliances rose 1.3 per cent in April after a 2.2 per cent jump.

Purchases also improved at internet retailers, restaurants, sporting goods stores and building materials outlets.