Retail sales in the U.S. barely moved higher in April, increasing just 0.1% from the month before, according to new Commerce Department figures.
The performance was far below the 0.4% increase a consensus poll of economists were forecasting, while the March hike was also revised upward to 1.5%.
Compared to the same time a year ago April activity increased 4%.
“After two back-to-back months of marked strength in retail sales more than offsetting the weakness in December and January, consumers have subsequently pulled back,” said Lindsey Piegza, chief economist for the investment firm Sterne Agee. “Remember consumers were busy spending at the end of the year and into 2014, but just not on goods? Service spending was the name of the game, particularly health care services as consumers enrolled in Obamacare, and utilities spending as the average family shelled out an extra $600 or in some cases $1,000 more this season just to heat the family home and combat one of the worst winters in years.”
She said this pent up demand for goods purchases, however, appears to have been satisfied in just two months time as the robust spending levels of February and March have all but disappeared into a lackluster near zero pace of spending at the start of the second quarter.
“Not a great first sign for those holding onto the dream of 3% or 4% gross domestic product in the near term,” Piegza said. “Of course one monthly retail sales report is not enough to extrapolate quarterly GDP, but it certainly undermines some of the optimism out in the marketplace.”
Furniture sales fell 0.6% in April, and electronics purchases dropped 2.3%. Miscellaneous sales dropped 2.3% at the start of the second quarter and non-store retailer sales declined 0.8%, as did eating and drinking sales.
On the stronger side, building materials increased 0.4% and food and beverage sales rose 0.3%. Health and personal care sales increased 0.6% and gasoline sales rose 0.8% after two months of decline in pump purchases. Clothing sales rose 1.2%, nearly the same as in March, and sporting goods sales increased 0.7%. General merchandise purchases rose 0.2% thanks to a 1.8% rise in department store sales.