May 12, 2017 – Retail Sales are the total amount of merchandise and related services sold to consumers. It is considered a sign of strength of U.S. Consumer spending, which accounts for roughly two-thirds of the economy. This indicator also provides insight into which areas of the retail space are experiencing strong sales, such as auto sales.
Retail sales increased from the March revision of 0.1% to 0.4%(+0.3%). This increase was below the consensus of 0.6%. Retail sales less autos were also under its consensus of a 0.5% gain by 0.2%. Sales excluding auto and gas were up only 0.3%, which is below March’s revised growth 0.4% (up from 0.1%). The control group had a weaker growth in April of 0.2%, below the consensus of 0.4% and after a revision to 0.7% the month before.
Retail sales in March were low in part because poor weather conditions and tax refunds were delayed as the IRS implements more security to combat fraud. April’s slow growth was unexpected given how high consumer confidence is. The good news is vehicles sales made a turnaround (+0.7%) after three months of decline. The rest of this quarter’s sales should show more promising growth. More brick and mortar stores are reducing their locations while e-commerce shows no sign of slowing down. Look for non-store retail sales to continue upward, and keeping track of sales compared to consumer confidence is still important to see if spending will bump up to match it.