Last updated: May 16, 2023 at 8:49 am ET
Originally published: May 16, 2023 at 8:37 am ET
The numbers: Sales at U.S. retailers rose 0.4% in April as strong demand for new autos and more consumer spending online provided a respite from a broader slowdown in consumer spending.
A Wall Street Journal poll of economists had forecast sales to rise 0.8%.
Retail plays a major role in consumer spending.
Numbers: Sales at U.S. retailers rose 0.4% in April as strong demand for new autos and more consumer spending online provided a respite from a broader slowdown in consumer spending.
A Wall Street Journal poll of economists had forecast sales to rise 0.8%.
Retail sales are a large part of consumer spending and provide clues about the strength of the economy. Before April’s increase, retail sales had fallen in four of the previous five months.
Excluding auto dealers and gas stations, retail sales rose a somewhat stronger 0.6% in April. Car and gasoline purchases tend to overstate overall retail spending.
Key Details: Sales of new vehicles and auto parts rose 0.4% last month.
On the other hand, receipts at gas stations fell 0.8%. They were expected to rise due to the rise in oil prices last month.
Excluding car dealers and gas stations, retail sales rose 0.6%, giving a better idea of consumer demand.
Sales increased at online retailers, general stores and home centers such as Home Depot
HD
and Lovin
Low
.
One category of economists looks closely at bars and restaurants, the only service sector in the retail trade report. Restaurant receipts rose 0.6%, the second straight month of gains
Restaurant sales rise when the economy is healthy and Americans are secure in their jobs. Sales tend to slow during economic downturns.
Big picture: The uptick in retail sales is unlikely to signal the start of a sustained upswing. Rising interest rates instituted by the Federal Reserve to curb high inflation have slowed the economy and curbed consumer appetite for big-ticket items.
Nevertheless, a super-strong labor market and rising incomes should avoid recession and lift retail consumer spending. Americans are still spending a lot of money on services like travel and entertainment.
Market Reaction: Dow Jones Industrial Average
DJIA
and the S&P 500
SPX
opened lower in Tuesday trade.
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