ARLINGTON, Va.—Total retail sales rose by 0.9% in April, following an increase of 1.4% in March and an increase of 1.7% in February—a sign that the Federal Reserve still has room to raise rates without causing a recession, according to a new NAFCU analysis.
"Retail sales saw sturdy growth for a fourth consecutive month in April, and a large upward revision to March further cements the case that despite weakness elsewhere in the economy, the American consumer is still as healthy as ever," stated NAFCU Chief Economist and Vice President of Research Curt Long.
Sectoral performance was mixed in April, the new federal data show. Miscellaneous store retailers were the biggest winners in April with 4.0% growth in sales, followed by motor vehicle and parts dealers (2.2%), nonstore retailers (2.1%), and food service and drinking places (2%). Gasoline stations were April's biggest loser (-2.7%), followed by sporting goods/hobby/musical instrument/bookstores (-0.5%), food and beverage stores (-0.2%), and building material/garden equipment and supplies dealers (-0.1%).
Could be ‘Pivot’ Point
Year-over-year growth in retail sales were up 8.2% during the month. Control group sales – which excludes auto, gas, and building material categories – were up 8.9% from a year ago, according to the government.
“According to the Commerce Department, growth in services spending rose each month in the first quarter, while spending on durable goods fell in February and March,” added Long. “This may be the start of the long-awaited pivot back to a more familiar spending mix from the COVID era's goods-oriented consumption pattern. Strong sales data should reassure the Federal Reserve that it has the space to raise rates without tipping the economy into recession.”
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