U.S. Retail Sales Boosted By Gasoline Outlays

The rise in gasoline prices could be sapping strength from spending on other goods. Or, weak April retail sales could be due to a payback after earlier strength. We'll know more in the next few months. Total retail & food service sales rose by 0.5% last month after a 0.9% March increase and a 1.3% February gain, both revised up from 0.4% and 1.1%, respectively. The April  rise roughly matched Consensus expectations for a 0.6% gain, according to the Action Economics survey. During the last three months, sales rose at an 11.1% annual rate versus a 6.4% increase during all of last year. Excluding autos, sales rose an expected 0.6% last month after an upwardly revised 1.2% March gain. During the last three months, nonauto sales rose at a 12.5% annual rate after a 5.7% increase last year.

The increase in spending on gasoline has been dramatic with higher prices, but that may be at the expense of spending elsewhere. Outlays on gasoline rose 2.7% last month (21.8% y/y) as the retail gas price jumped 6.7% to an average $3.80 per gallon from $3.56 during March. Haver Analytics calculates that adjusted for normal seasonal patterns, the gas price rose a lesser 2.4% m/m.

The first sign of a moderation in spending may be on motor vehicles & parts. The 0.2% April increase followed a 0.7% March decline but the three-month gain dropped to 4.7% (AR) from its 18.7% peak as recently as February. The real kicker is that excluding gasoline and autos, retail spending rose just 0.2% last month, its weakest gain of the year. However, three-month growth in sales excluding autos & gasoline remained a firm 7.9%. 

Discretionary spending showed widespread easing. Sales of furniture, home furnishings and appliances fell 1.7% but remained up at a 7.4% rate during the last three months. April sales at furniture stores fell 1.1% (+0.8% y/y) after a 2.4% March gain while sales at electronics & appliance stores plunged 2.2% (0.9% y/y) and gave back nearly all of March's 2.9% rise. Apparel store sales rose 0.3% but that followed strong gains during the prior three months. Finally, sales at general merchandise outlets inched up just 0.1% but rose at a 6.2% rate during the last three months. Building material store sales rose 0.1% after the 2.5% March spurt and sales at food service & drinking places slipped 0.1% but still rose at an 11.2% rate over the last three months. Not to be outdone, sales of non-store retailers rose 1.0% but three-month growth fell to 9.9%. Currently, sales by electronic shopping & mail-order houses account for roughly ten percent of nonauto retail sales less building materials & gasoline.

The retail sales figure are available in Haver's USECON database. The Action Economics figures are in the AS1REPNA database.