U.S. retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, which could temper expectations for a sharp rebound in consumer spending after it slowed in the first quarter.
The Commerce Department said on Wednesday retail sales slipped 0.2% last month. Data for March was revised slightly up to show retail sales surging 1.7%, the largest increase since September 2017, instead of the previously reported 1.6% jump. Economists polled by Reuters had forecast retail sales gaining 0.2% in April. Retail sales in April increased by 3.1% from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged in April after an upwardly revised 1.1% acceleration in March. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have soared 1.0% in March. Consumer spending accounts for more than two-thirds of economic activity. While March's strong core retail sales set consumer spending on an upward trajectory in the second quarter, last month's weakness suggested the pickup in consumption could be moderate.
Consumer spending grew at a 1.2% annualized rate in the first quarter, the slowest in a year. The economy grew at a 3.2% pace in the January-March quarter, getting a temporary boost from exports and accumulation of inventory.
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