NEW YORK – Retail sales fell in the U.S. for a second straight month in April, surprising economists and raising concerns about the prospects for economic recovery.
The U.S. Commerce Department said today that monthly retail sales nationwide decreased 0.4 percent in April, following a revised drop of 1.3 percent in March. Retail sales had increased in January and February after falling for six months.
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If vehicle purchases are excluded, the April sales decline was 0.5 percent.
The report was worse than the median expectation of 67 economists surveyed by Bloomberg News, who had forecast that retail sales would be unchanged from March. Furthermore, the economists had expected sales excluding car purchases to rise 0.2 percent.
“The consumer remains in a difficult situation,” Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, was quoted by Bloomberg as saying in a research note released prior to the report. “It remains unclear how they will proceed forward as credit access fades alongside further home price deterioration and an increasingly difficult financial environment.”
The report said sales fell steeply at electronics, furniture, clothing and grocery stores in April, Bloomberg reported, and service station sales posted a decline despite higher gasoline prices.
By contrast, the International Council of Shopping Centers, a trade group, had said in a report last week that same-store sales rose 0.7 percent in April, the first increase the association’s survey had seen since September, Bloomberg said.
Consumer spending makes up roughly 70 percent of the nation’s gross domestic product, and has been a key driver of economic growth in recent years.
“There’s weakness across quite a large number of categories,” Nigel Gault, chief U.S. economist at IHS Global Insight, told The New York Times this morning. “We had huge declines during the fourth quarter, and then we had a couple of decent months of rebound. But now we’ve reversed most of that.”
“What we’ve got is a consumer that’s roughly stabilized, but not a consumer who’s ready to come back and drive the economy,” he added.
