05/11 08:30
U.S. April Retail Sales Rise 0.8%; Excluding Autos Up 0.7%
By Carlos Torres
Washington, May 11 (Bloomberg) -- U.S. retail sales rose more than expected in April as business increased at auto dealers, building materials outlets and department stores, a government report showed. Higher prices lifted gas station sales.
Sales at retailers rose 0.8 percent in April to $275.5 billion after falling a revised 0.4 percent in March, the Commerce Department said. Excluding automobiles, sales rose 0.7 percent after falling a revised 0.4 percent the previous month.
The April sales increase, the first since January, suggests that consumers are confident enough about their jobs and outlook for incomes to keep spending.
``Consumers continue to show resilience,'' said Richard Yamarone, senior economist at Argus Research Corp. in New York, before the report. ``Strong income growth, income tax refunds and mortgage refinancing are fueling current spending activity.'' Federal tax refunds totaled almost $125 billion as of April 30, up 5.3 percent from $188.6 billion as of April 21, 2000, according to the Internal Revenue Service. The average refund rose 5.5 percent to $1,714.
Lower interest rates have led to an increase in mortgage refinancing this year. In March, an index of applications to refinance mortgages rose to the highest level since October 1998, according to the Mortgage Bankers Association of America. Consumers often spend the money they save when their mortgage payments are reduced.
Analysts expected retail sales to rise 0.1 percent to $274.4 billion in April after a previously reported drop of 0.2 percent in March. They also expected a 0.4 percent rise in spending excluding automobiles after a previously reported 0.1 percent March decrease.
Automobile Dealers
Sales at automobile dealers rose 1 percent last month after falling 0.2 percent in March. Before the report, analysts expected a drop in auto dealer sales after industry figures showed a decrease during the month. Sales of cars and light trucks fell to 16.7 million units at an annual rate in April, the lowest this year, down from 17.1 million in March, industry data showed last week.
The government's auto figures don't always track industry statistics because the Commerce Department surveys auto dealers, while industry statistics are gathered from the nation's automobile manufacturers.
Sales of building materials, hardware, garden supplies and other goods increased 1.5 percent in April. Last month's increase was the largest since a 1.5 percent increase in May of last year.
Department Stores
Sales at general merchandise stores, which include department stores, rose 2.1 percent in April, the largest increase since January 1999. Sales at department stores rose 1.8 after falling 0.7 percent. Sales at clothing and accessory stores rose 1.6 percent in April after a 1.8 percent drop.
Gap Inc., the largest U.S. clothing retailer, said yesterday its fiscal first-quarter profit exceeded estimates by 1 cent to 2 cents because April sales were better than expected. Same-store sales fell 2 percent in April. Analysts had forecast a decline of as much as 10 percent.
Gasoline service station sales rose 2.5 percent in April after falling 2.1 percent in March, also reflecting higher prices. The price of retail gasoline rose to $1.66 per gallon in April, up 15 percent from the previous month and the highest since June, according to data from the Department of Energy.
Sales of furniture, home furnishings and equipment fell 0.5 percent after falling 1.1 percent in March. Sales at restaurants and bars fell 0.8 percent in April after rising 0.1 percent in March.
Restaurants
O'Charley's Inc., which operates a chain of casual restaurants, said this week fiscal second-quarter profit will be lower than expected because consumers are eating out less often.
``We believe the slowing U.S. economy and the uncertainty created by recent consumer confidence and unemployment statistics have had an affect on consumer buying patterns that are only recently having an impact on our sales,'' said Gregory L. Burns, O'Charley's chief executive officer, in a statement.
The economy grew at a 1.5 percent annual pace between October and March, the slowest since a 1.1 increase in the first half of 1995.
Federal Reserve policy makers have responded to slowing growth by lowering interest rates. Central bankers reduced their target for the overnight bank-lending rate by two percentage points since January and are expected to lower it next week.
Analysts said they had been concerned that rising unemployment would take a toll on spending. The unemployment rate rose in April to 4.5 percent, the highest in 2 1/2 years, and the economy lost 223,000 jobs, more than at any time in the last decade.
That's one reason the Conference Board's index of consumer confidence fell in April to 109.2, matching the February level that was the lowest since October 1996. Only 40 percent of consumers saw jobs as plentiful, the smallest share since November 1997.
Today's report is a preliminary survey of sales at about 4,000 stores. The final report, which will be released next month, covers sales at about 13,000 businesses. |
