LDN - Business

U.S. retail sales increase broadly in April

[May 12, 2017] WASHINGTON (Reuters) - U.S. retail sales increased in April as households bought more motor vehicles and a range of other goods, suggesting the economy was regaining momentum after almost stalling in the first quarter.

The Commerce Department said on Friday retail sales rose 0.4 percent last month. March's retail sales were revised up to show a 0.1 percent gain instead of the previously reported 0.2 percent drop.

Economists polled by Reuters had forecast retail sales increasing 0.6 percent last month.

Retail sales rose 4.5 percent in April on a year-on-year basis.

Excluding automobiles, gasoline, building materials and food services, retail sales gained 0.2 percent after an upwardly revised 0.7 percent gain in March.

These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have risen 0.6 percent in March.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 0.3 percent annualized rate in the first quarter, the weakest pace since the fourth quarter of 2009.

That contributed to holding down first-quarter GDP growth to a 0.7 percent rate.

Signs of firming economic growth could bolster expectations that the Federal Reserve will increase interest rates at its policy meeting next month.

Consumer spending is being supported by a tightening labor market, marked by an unemployment rate at a 10-year low of 4.4 percent.

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An H&M store has sale signs in the window in New York City, U.S., August 11, 2016. Picture taken August 11, 2016. REUTERS/Joe White

Motor vehicle sales increased 0.7 percent in April after declining 0.5 percent in March. Receipts at service stations rose 0.2 percent in April.

Sales at building material stores rebounded 1.2 percent last month after slumping 1.7 percent in March.

Receipts at electronics and appliance stores increased 1.3 percent, adding to March's 2.2 percent jump.

But sales at clothing stores fell 0.5 percent after rising 1.2 percent in March.

Department store retailers have been hurt by declining traffic in shopping malls and increased competition from online retailers, led by Amazon.com

Retail giant Macy's Inc on Thursday reported a 4.6 percent drop in sales in the first quarter.

Sales at online retailers jumped 1.4 percent in April.

Receipts at restaurants and bars gained 0.4 percent while sales at sporting goods and hobby stores accelerated by 0.6 percent.

((Reporting by Lucia Mutikani; Editing by Paul Simao))

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