U.S. retail sales in April were virtually unchanged from March, according to a Commerce Department report released Wednesday morning.
This latest reading follows a revised 1.1% increase in March from February, up from an earlier reported 0.9% gain.
Compared to April 2014, retail sales were 0.9% higher -- much less than the year-over year growth of 4.7% in April 2014 compared to a year before. Sales in February through April of this year increased 1.5% from the same time last year.
The lack of an increase in April came as a bit of a surprise to some analysts, who were expecting an increase due to gasoline prices remaining about $1 per gallon less than a year ago. Apparently consumers are socking those savings away rather than spending.
Sales in April at auto dealers, as well as appliance and electronics stores, fell 0.4%, while furniture store sales dropped 0.9%.
“No matter how you slice it, April sales were downright weak," said Sterne Agee Chief Economist Lindsey Piegza. "Any lingering claim that the weakness at the start of the year was solely the result of unseasonably cold winter weather has now officially been squashed. Clearly the consumer remains under pressure resulting from fundamental weakness as opposed to Mother Nature, including lackluster job opportunities and minimal income growth.”
She said from the Federal Reserve’s perspective, this disappointing retail report further solidifies its more muted tone on the economy, keeping interest rate hikes off the table for quite some time.
“After all, as a consumer-based economy, if the consumer is retreating, expectations for growth are unlikely to be met,” she said. “With such a weak start out of the gate, the economy will now have to maintain a greater than 3% gross domestic product pace in order to meet even the Fed’s new, lower bar of expectations.”
Figures released late last month show the GDP in the first quarter of the year increased at an annual rate of just 0.2%, down from a 2.2% rate in the final quarter of 2014 and far below many expectations.