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Economy in Brief

U.S. Retail Sales Boosted By Gasoline Outlays
by Tom Moeller  May 12, 2011

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.

Retail Spending (%) Apr Mar Feb Apr Y/Y 2010 2009 2008
Total Retail Sales & Food Services 0.5 0.9 1.3 7.6 6.4 -7.0 -1.2
  Excluding Autos 0.6 1.2 1.2 6.9 5.7 -5.5 2.1
Retail Sales 0.6 0.9 1.2 7.9 6.8 -7.8 -1.6
   Motor Vehicle & Parts 0.2 -0.7 1.7 11.0 9.9 -13.7 -14.0
 Retail excluding Autos 0.7 1.2 1.1 7.1 6.1 -6.3 2.1
   Gasoline 2.7 4.1 2.8 21.8 16.8 -22.2 10.4
 Non-Auto Less Gasoline 0.2 0.7 0.9 4.7 4.2 -2.9 0.9
Food Service -0.1 1.0 1.8 5.2 2.8 0.5 2.4
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