April US retail sales undershoot forecasts

15th May 2024 12:13

(Sharecast News) - American consumers reined in their spending last month, especially on motor vehicles and parts, as well as online.

But economists were quick to point to payback from the expiry of a one-off Amazon sales event as a key - and therefore temporary - factor behind the decline.

According to the Department of Commerce, in seasonally adjusted terms retail sales volumes were flat month-on-month at $705.18bn (consensus: 0.4%).

April's miss versus economists' forecasts came on top of a one tenth of a percentage point downward revision to the prior month's rise to 0.6%.

Sales fell in most product categories with the largest drags coming from a 0.8% decline in sales of motor vehicles and parts to $132.3bn, followed by a 1.2% drop in those at non-store retailers to reach $119.33bn.

Gasoline station sales on the other hand jumped by 3.1%, alongside a 1.6% increase in those at clothing stores.

"Consumer spending is slowing as elevated interest rates weigh on rate-sensitive spending and as the labor market cools. With aggregate balance sheets solid and the labor market cooling rather than collapsing, we expect that slowdown will remain gradual," said Michael Pearce, deputy chief US economist at Oxford Economics.

"The resilience of the economy frees the Fed to focus on the incoming inflation data to guide its rate decisions, which we think will improve over the coming months and prompt the Fed to begin gradually easing rates beginning in September."

-- More to follow --