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Economy in Brief

U.S. Retail Sales Fell in April, Nonauto Sales Firmer
by Tom Moeller May 13, 2008

U.S. retail sales fell an expected 0.2% last month after an unrevised 0.2% March increase. These latest two months' sales point up the recent weakness in consumer spending. The April sales level was down 0.8% from its peak last November. On a three month basis overall retail sales were down 2.0% (AR).

Lower sales of motor vehicles & parts account for much of that weakness. A 2.8% (-7.3% y/y) April decline was the sixth drop in the last seven months and it mirrored the 4.3% m/m decline in unit vehicle sales last month.

Retail sales excluding autos rose 0.5% and the rise exceeded expectations for a 0.2% gain. That gain followed a revised 0.4% March increase which was revised up from the 0.2% advance reported initially.

Lower sales at gasoline service stations also accounted for some of last month's weakness in overall retail spending. They fell 0.4% (+16.3% y/y) after a 1.6% March jump. The sales decline occurred as the pump price of gasoline rose 6.6% m/m. Retail sales less gasoline & autos rose 0.6% (2.8% y/y) after a 0.2% March gain that was revised up from no change. On a three month basis these sales improved to a 3.2% rate of growth from a low of -1.0% this past February.

Sales of discretionary items improved. Furniture, home furnishings & appliance store sales finally rose, by 0.8% (-0.8% y/y) after four consecutive months of flat or lower sales. The gain was due to a 1.4% (4.0% y/y) jump in sales of electronics & appliances. Sales of furniture & home furnishings continued to languish, however, and ticked up just 0.1% (-5.1% y/y). Apparel store sales rose 0.7% (3.0% y/y) following a similar gain in March that was revised up from a 0.5% decline reported initially. Sales at general merchandise stores rose 0.5% (4.2% y/y) after a 0.1% uptick that was revised up from a sharp 0.6% decline reported last month.

Building materials & garden equipment sales surged 1.9% (-2.0% y/y) and recouped the 1.5% decline during March.

April sales of nonstore retailers (internet & catalogue) fell slightly m/m (+2.4% y/y) after a 0.5% March increase, but that increase was revised down from the 2.1% surge reported initially.

Restaurant and drinking places sales rose 0.9% (4.2% y/y) last month.

Liquidity Provision by the Federal Reserve is today's speech by Federal Reserve Chairman Ben S. Bernanke and it can be found here

  April March Y/Y 2007 2006 2005
Retail Sales & Food Services -0.2% 0.2% 2.0% 4.0% 6.2% 6.6%
  Excluding Autos 0.5% 0.4% 4.4% 4.5% 7.4% 7.6%
    Less Gasoline 0.6% 0.2% 2.8% 4.1% 6.2% 6.4%
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