US retail sales up 0.1 pct. in April; spending online and on furniture and electronics dips

WASHINGTON – U.S. retail sales growth slowed in April, with consumers shopping less online and cutting back on purchases of furniture and electronics.

The Commerce Department said Tuesday that retail sales rose just 0.1 per cent last month, after surging 1.5 per cent in March following a harsh winter that had curtailed shopping.

Auto sales increased 0.6 per cent in April, and purchases at clothing stores were up 1.2 per cent. But most of those gains were offset by declines in spending at restaurants, online retailers and furniture and electronics stores. Excluding autos and gasoline, retail sales fell 0.1 per cent last month.

The modest sales suggest that consumers continue to be cautious during the still-slow, nearly 5-year recovery. Higher sales would help drive faster overall economic growth because consumers account for about 70 per cent of all economic activity.

But wages have not budged much during the recovery, and growth has struggled to eclipse 3 per cent, the average annual gain after World War II.

The Commerce Department previously reported that the economy grew just 0.1 per cent in the January-March quarter. That figure could slip into negative territory as the government revises it, according to several economists.

But the brutal winter depressed the economy during the first quarter, and economic indicators since then have pointed to stronger growth in the current April-June quarter. Many economists are looking for a rebound to growth of around 3 per cent in the current quarter and similarly solid readings for the rest of the year.

Hiring has been strong for the past three months. Employers added 288,000 jobs in April, after gains of more than 200,000 in the previous two months. But average wages were flat in April.

The slow but steady improvement expected for this year has led the Federal Reserve to trim its monthly bond purchases. The Fed is buying $45 billion of bonds each month, down from $85 billion. The purchases were intended to reduce long-term interest rates in order to stimulate borrowing, spending and growth. But with the economy gaining strength, Fed officials believe that type of support is no longer needed.