Retail Sales Declined 0.2% in April,Posting First Drop in Nearly 2 Years
An INTERACTIVE JOURNAL News Roundup
May 11, 2000
WASHINGTON -- Retail sales dropped unexpectedly in April, posting their first decline nearly two years.
Separately, a plunge in oil prices for the month helped the U.S. import-price index post its largest fall-off in seven and a half years.
The Commerce Department said Thursday that retail sales fell 0.2% to a seasonally adjusted $266 billion last month. It was the first time sales had dropped since August 1998. Excluding the volatile autos category, retail sales were unchanged last month.
Economists surveyed by Thomson Global Markets expected overall sales as well as sales excluding autos to grow by 0.4%.
The surprise was at least in part due to sharp revisions in data from the month before. And recovery from a winter's worth of rising oil prices also played a part. There were, however, signs in the report that the economy's lightning speed may be slowing.
March retail figures were revised upward to show a gain of 0.5% from the 0.2% increase previously reported. And sales excluding autos were revised to a 1.2% increase from a 0.9% jump.
A sharp drop in sales at gasoline stations led last month's decline. Gasoline sales fell a sharp 2.3% in April following a big 4.3% gain the month before. Prices at the pump peaked in March but edged down in April, reflecting lower crude-oil prices and a decision by the Organization of Petroleum Exporting Countries to increase production.
Falling sales for cars, clothing and building supplies also contributed to April's weaker-than-expected performance.
Sales of new cars and trucks declined by 0.7% in April after a 1.4% decrease the month before. The auto industry reported a record 17 million cars and light trucks sold in 1999 and is projecting lower but still robust sales for this year.
Clothing stores saw sales fall by 0.9% last month following a 1.6% increase in March.
Department-stores sales rose by 0.4% after a 0.7% increase the month before. Many of the nation's biggest chain stores last week reported disappointing sales for April, something analysts blamed on dreary weather rather than a sweeping pullback in consumer spending because of rising interest rates or stock market volatility.
The Federal Reserve has raised interest rates five times since June in an effort to slow the economy and head off inflation. An additional rate increase is expected at the Fed's meeting Tuesday, and the prospect of aggressive rate moves by the central bank have sent financial markets on a roller-coaster ride in recent months.
Nevertheless, many merchants were expecting April to be a blockbuster month. Easter fell three weeks later this year than last, shifting most of the holiday buying into April from March a year ago.
Import Prices Decline 1.6%
In a separate report, the Labor Department said that the price of goods imported to the U.S. fell 1.6% during April following a revised 0.2% rise in March. Despite the recent decline, though, April import prices were up 6.3% from a year earlier.
The monthly decline in import prices was attributable entirely to sagging oil prices. Excluding petroleum, import prices rose 0.1% during April, moderating slightly from March's 0.2% increase. Nonpetroleum prices rose 1.3% over the previous 12 months.
Petroleum import prices fell 12.7%, posting the largest decline since December 1998, following a 0.7% drop in March. Nevertheless, oil import prices were up 71.5% year-over-year.
Import prices from Japan rose 0.4% during April, while prices from the Asian Newly Industrialized Counties fell 0.5%. Canadian import prices posted the first drop in more than a year, declining 0.1%. European Union import prices, meanwhile, fell 0.8% in April, the largest drop since March 1997.
Export prices fell in April for the first time since December. Exports fell 0.1% in value after a revised 0.5% increase in March. Year-over-year, however, export prices were up 2.0% in April.
Jobless Claims Drop to 297,000
Separately, the Labor Department said initial jobless claims slipped 7,000 to 297,000 during the week ended May 6. Economists surveyed by Thomson Global Markets expected claims to fall by 13,000 from last week's preliminary level of 303,000, which was revised slightly to 304,000.
The four-week moving average of claims, which smoothes out weekly fluctuations in the data, rose 7,750 to 285,250, reaching the highest level since late January. |
