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Economy in Brief

U.S. Retail Sales Decline For A Second Month
by Tom Moeller May 13, 2009

U.S. retail sales continued to struggle last month following the recovery earlier this year. In fact, virtually all of that recovery has been erased by the latest declines. April retail sales declined by 0.4% following their 1.3% March drop. Moreover, sales both during March and back to 2007 were revised lower with benchmark changes to the data series. The latest decline in retail sales fell short of expectations for no change month-to-month. The retail sales data are available in Haver's USECON database.

Unlike prior months, motor vehicle sales were not so much responsible for the decline in overall consumer purchases. Vehicle sales rose 0.2% following two months of sharp decline. However, the increase contrasted with the earlier report that unit vehicle sales fell 5.5% in April. Also contradictory was a 2.3% decline in gasoline service station sales despite a 4.6% m/m rise in gasoline prices.

Elsewhere the news in last month's retail sales report was weak as discretionary spending was pulled back. Sales at furniture, electronics & appliance stores fell another 1.7% (-13.1% y/y) following the 5.2% drop during March which was deeper than reported initially. Furniture store sales alone ticked down 0.5% (-14.2% y/y) while sales of electronics & appliances again fell sharply. The 2.8% April drop (-12.0% y/y) followed a 7.8% March decline.

In the soft goods area apparel store sales slipped by 0.5% (-6.5% y/y) after a 2.9% March decline. Sales at general merchandise stores also staggered and slipped 0.1%. They are virtually unchanged over the last twelve months.

And internet purchases continued lower. Sales at non-store retailers slipped 0.1% (-7.8% y/y) after a 1.2% March drop. Restaurant sales also have been weak but they did rise 0.2% (1.4% y/y).

Building materials sales squeaked out a 0.2% increase last month but they still are down by 10.7% from last April.

Supply Shocks, Demand Shocks, and Labor Market Fluctuations from the Federal Reserve Bank of St. Louis is available here.

  April March February Y/Y 2008 2007 2006
Retail Sales & Food Services (%) -0.4 -1.3 0.4 -10.1 -0.7 3.3 5.3
  Excluding Autos -0.5 -1.2 1.1 -7.7 2.5 3.9 6.3
    Less Gasoline -0.3 -1.0 0.8 -3.1 1.6 3.6 5.7
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