U.S. retail sales rise below market expectations in April

The U.S. retail sales grew in April, but came in below consensus expectations. Retail sales rose 0.4 percent sequentially in the month, as compared with the consensus expectations of 0.6 percent. Core retail sales was up 0.2 percent, as compared with consensus projection of a rise of 0.4 percent.

Looking at the detail of the report, the headline figure was boosted by the recovery in April auto sales as motor vehicle sales rose 0.7 percent in April, after falling 0.5 percent in the previous month. Overall, sales rose in nine out of the thirteen major categories, with electronics, autos, building materials and non-store retailers recording huge rises on the month. Declines were seen in clothing, furniture, general merchandise and food and beverages.

However, upward revisions to prior months countered the below-consensus April data, noted Barclays in a research report. Retail sales report for February and March indicated declines of 0.3 percent and 0.2 percent, respectively. The February print was upwardly revised to a drop of 0.2 percent, whereas the March data was revised up to 0.1 percent. Thus, retail sales indicated a bit more strength ending the first quarter than before and provide a slightly better take-off point for the second quarter, stated Barclays.

“With the release of the April retail sales data, we begin our tracking estimate of Q2 GDP. Heading into today’s report our official forecast for Q2 GDP growth is 2.5 percent on, among other items, a rebound in private consumption spending”, added Barclays.