Retail sales slowed to a crawl in April vs. the previous month, rising a slim 0.1%, the US Census Bureau reports. Excluding gasoline, retail spending was flat. The news contrasts sharply with the March data, which revealed a dramatic 1% jump in spending. For the moment, however, it’s reasonable to dismiss the latest update as noise. The year-over-year change through last month (+4.0%) was off only marginally from annual pace in March (4.1%), suggesting that retail activity is still rolling forward at a robust rate.
Although some analysts may see the slowdown in April as a dark sign, it’s reasonable to wonder if it’s simply a response to the unusually strong advance in the previous month. For now, that’s a compelling explanation for interpreting today’s data. Monthly numbers bounce around a lot, and not necessarily for substantive reasons. The fickle nature of consumer behavior at one point in time has been known to lead in the delicate business of estimating the broad economic trend. As long as the year-over-year data looks healthy, we can safely overlook the squiggle du jour for any one data set.
Meantime, the argument that retail activity will continue to rise at a moderate rate draws support from the generally upbeat numbers in April from other corners of the economy, including the ongoing if still-moderate trend in the annual growth of private payrolls through last month. There’s also a healthy tailwind blowing from a broad set of economic and financial indicators through March, and the early signals for April don’t look threatening, at least not so far.
That includes today’s figures. The fact that retail spending posted back-to-back annual gains of 4% in each of the past two monthly updates—the strongest run since last summer—suggests that a decent rate of growth will prevail for the near term in the land of the consumer.