Disappointing retail sales and a dip in an index that measures diesel purchases have some wondering if the economic recovery slowed in April, but other indicators including manufacturing and durable goods production, increased.


The 0.5 percent growth in U.S. retail sales in April was disappointing to analysts, which estimated a 1.7 percent growth in retail sales, according to published reports. The news could be a sign that consumers are still playing it safe.

Last week, Reuters reported that several retailers announced lower than expected sales for April. For example, Target said net retail sales for April were down 3.5 percent to $4.3 billion. Comparable-store sales decreased 5.9 percent, Target said.

One carrier's take

However, according to analysis by less-than-truckload carrier YRC Worldwide, there are other positive metrics of economic activity. The company believes consumer activity should not be based on this one figure.

YRC said the April figure took analysts by surprise because other consumer-based metrics, such as the individual savings rate and household incomes, would typically yield improved retail spending.

In addition, manufacturing activity has been very strong this year, which was believed to be spurred by real demand, YRC said.

"This retail report is not the 'end all' of reports on the consumer," YRC said. "There are many other positive metrics now suggesting that the rest of the year will be a steady climb out of the economic doldrums. But, until the unemployment rate begins to soften and real job growth starts, the consumer will be lukewarm on spending."

According to U.S. Census Bureau data released today, U.S. retail and food services sales were up 0.4 percent month-over-month in April, and up 8.8 percent from April 2009. Retail trade sales grew 0.5 percent from March 2010, with a 9.6 percent boost over April 2009. Gasoline stations sales gained 30.1 percent year-over-year, while motor vehicle and parts dealers sales increased by 15.1 percent from last year, the Census Bureau reported.

Fuel figures

Meanwhile, the Ceridian-UCLA Pulse of Commerce Index released this week was down 0.3 percent in April, a sign the recovery may be stalled. However, the index saw 6.5 percent growth year-over-year.

The PCI represents real-time diesel fuel consumption data from over-the-road trucking tracked by Ceridian, a provider of electronic and stored value card payment services and human resources solutions.

While the PCI measured year-over-year declines prior to December 2009, April marks the fifth straight month the index has seen year-over-year improvements. But Ceridian says year-over-year growth of 10 to 15 percent in the PCI is required to drive down the unemployment rate.

Ceridian says the PCI closely tracks the Federal Reserve's monthly Industrial Production index. The most recent PCI predicted Industrial Production would grow by 0.4 percent in April. According to the Federal Reserve's figures released today, industrial production grew 0.8 percent in April, higher than the PCI's most recent prediction. In March, industrial production rose 0.2 percent.

In addition, the Federal Reserve said manufacturing output increased 1 percent in April, while capacity utilization for manufacturing was up 0.8 percent to 70.8 percent. This is 5.7 percentage points higher than its trough in June 2009.

Durable goods production was 1.1 percent higher in April, with all major categories strengthening, except for motor vehicles and parts and aerospace and miscellaneous transportation equipment. Nondurable manufacturing grew 1 percent in April.