Up 0.9% versus 1.0% estimate

A woman pushes a shopping cart through the grocery aisle at Target in Annapolis, Maryland May 16, 2022 as Americans brace for summer sticker shock as inflation continues to rise.

Jim Watson | AFP | Getty Images

Consumers continued to spend in April, with retail sales roughly in line with Wall Street expectations despite continued price increases.

Monthly sales rose 0.9% overall, just below the Dow Jones estimate for a 1% increase, the Commerce Department reported on Tuesday. Ex-autos, sales rose 0.6%, better than the 0.4% estimate.

The numbers aren’t adjusted for inflation, so they indicate both continued spending and the fastest acceleration in prices the US economy has seen in about 40 years.

“April retail sales show consumers are weathering inflationary headwinds and rising for the fourth straight month,” said Jeffrey Roach, chief economist at LPL Financial. “Core categories are showing signs that consumers are likely to save to offset the drop in real wages. If price pressures can ease enough to ease some of the pressure on consumers, we expect economic growth to pick up in the second quarter.”

In addition to the solid showing in April, March spending has been revised significantly higher, from the original estimate of a 0.5% increase to 1.4% growth. Non-car sales were also revised sharply higher, up 2.1% in March from 1.1% originally.

Year over year, sales were up 8.2% versus the total and 10.9% excluding autos.

Gains in April were driven by a 4% gain in diverse retail stores and a 2.1% rise in online sales. Bars and restaurants were also up a solid 2%. All three categories posted larger gains than in March.

The gains came despite a 2.7% drop at service stations as energy prices eased over the month. Excluding petrol stations, sales increased by 1.3%. Despite the monthly decline, gasoline sales rose 36.9% year-on-year.

Sales at bars and restaurants rose 19.8% year-on-year as the economy struggled with Covid-related restrictions.

The sales data are broadly consistent with an economy that continues to grow despite inflationary pressures. Prices rose 0.3% overall in April and 0.6% excluding food and energy. On an annualized basis, the consumer price index rose 8.3% versus headline and 6.2% versus core in April.

Gross domestic product fell 1.4% on an annualized basis in the first quarter, but most economists expect growth to pick up later in the year.

A separate report Tuesday showed that industrial production rose 1.1% in April, according to Fed data, well above the Dow Jones estimate of 0.5%. Capacity utilization, or realized production potential, rose to 79%, slightly above the estimate of 78.6%.

https://www.cnbc.com/2022/05/17/retail-sales-april-2022-up-0point9percent-vs-1point0percent-estimate.html Up 0.9% versus 1.0% estimate

Jane Marczewski

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