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Autos Boost April Retail Sales; Retail Space Under Siege

Driven by stronger auto sales (but held back by falling gasoline prices), total retail sales increased an unexpected 0.1 percent in April, the ""Census Bureau"":http://www2.census.gov/retail/releases/historical/marts/adv1304.pdf reported Monday. Economists had expected sales to fall 0.3 percent. In March, retail sales fell a revised 0.5 percent.

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Total retail activity rose $377 million in April though, sales at gasoline stations fell $2.15 billion month-over-month. Consumers did not transfer the savings at the pump to other merchandise.

Sales increased $559 million at non-store retailers, improving for the sixth straight month and the 13th time in the last 15 months, threatening commercial retail space.

Auto sales (including parts) rose $783 million for the month; excluding auto sales, retail activity dropped 0.1 percent after falling 0.4 percent in March.

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The retail report suggests consumer wallets remain under assault. In January, take-home pay was reduced with the restoration of a two-year 2 percentage point payroll tax cut, and in April, according to the Bureau of Labor Statistics, (BLS) average weekly hours fell, resulting in a drop in average weekly earnings.

Sales at building material and supply stores jumped $389 million for the month, a 1.5 percent increase--the largest month-over-month increase since September. Sales at furniture and home furnishings stores were flat to March. Those two retail categories have a direct relationship to home sales. A drop in spending in those categories could suggest new homeowners might be struggling.

While often reported as a measure of consumer activity, the retail sales report is price-driven. Data in the report are ""adjusted for seasonal variation and holiday and trading-day differences, but not for price changes,"" according to the Census Bureau.

On a year-over-year basis, April sales were up 3.7 percent compared with a 3.0 percent annual increase in March.

In addition to the month-over-month drop at gasoline stations, sales declined at food and beverage stores and at health and personal care stores.

Sales increased at restaurants, clothing stores, electronics stores, and sporting goods stores.

In April, total retail employment increased a net 29,300, according to BLS, improving in most sub-categories except electronics stores.

_Hear Mark Lieberman on P.O.T.U.S.--Sirius 124--every Friday at 6:20 a.m. Eastern._

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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