April retail sales are flat compared to March, with annual gains minimal

Very modest gains in retail sales remained the norm, according to data for the month of April issued today by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that April retail sales at $436.8 billion were essentially flat compared to March and up 0.9 percent compared to April 2014. It added that total retail sales from February through April were up 1.5 percent annually.

The NRF said that April retail sales, which exclude automobiles, gas stations, and restaurants, were flat compared to March and increased 1.9 percent annually. NRF officials said that the Easter holiday falling earlier this year was not a major factor in consumer spending and retail sales in April.

“Retail sales disappointed in April. Sales were virtually unchanged, following an upwardly revised gain in March,” NRF Chief Economist Jack Kleinhenz wrote in a blog posting. “April retail sales —similar to March sales—were effected positively and negatively by the Easter-calendar shift. Taken together, consumer spending on a year-over-year basis was anemic. Consumers are the key driver of the economy but they can spend more! Employment gains, wage and salary increases and greater savings are all fuel for the consumer spending engine to be tapped for the rest of the year.”

The NRF executive added that on the surface it looks like more sales were conducted at much lower prices, with consumers taking advantage of the low cost of goods and merchandise, noting that these flat retail sales numbers may not definitively exemplify the health or strength of consumer spending.

Supply chain stakeholders have described the current market environment as it relates to retail supply chains as steady for the most part in recent months. But with fuel sales still relatively low, it again did not carry over into increased consumer spending in April.

What's more the first advance estimate of GDP data issued by the Department of Commerce came in at a weak 0.2 percent growth rate, and the most recent batch of monthly employment data for the month of April was the weakest it had been in a year, making it clear that consumers are not “all in” on purchase activity as well.

“Consumers indeed drive the economy—when they’re spending,” said Chuck Clowdis, managing director, transportation advisory services, IHS Global Insight. “But there are still cautious and careful buying decisions being made in this still uncertain economy. It’s my thought that consumers have learned to watch for positive signs of security and that ‘a good week or month do not necessarily indicate a robust recovery. Put a few quarters together and spending may take off.”

SC
MR