U.S. April Retail Sales - Ex auto and gasoline still showing underlying resilience
April retail sales with a rise of 0.5% overall, 0.7% ex autos and 0.5% ex autos and gasoline are in line with expectations, and while likely to be marginally negative overall in real terms the ex autos and gasoline data suggests continued consumer resilience. Initial and continued claims have both picked up from two exceptionally low weeks, but remain at a low level.
Auto sales fell by 0.4% after gains of 0.6% in February and 1.0% meaning the dip is not a clear sign of weakness. A 2.8% increase in gasoline sales looks like a decline in real terms, slowing more from March’s 13.7% surge than did gasoline price gains.
April’s budget statement showed income tax revenues falling yr/yr for the first time since October 2024 with tax cuts being reflected in larger refunds. This is providing some offset to the damage done by higher gasoline prices.
Within the retail sales detail food was firm with a rise of 0.8% but is still negative on a 3 month/3 month basis. Clothing and furniture saw declines, but are still positive on a 3 month/3 month basis.
3 month/3 month gains of 2.2% overall and 2.5% ex auto are inflated by gasoline, but the 3 month/3 month gains ex auto and gasoline is the highest since March 2023, and that is quite impressive.
Initial claims at 211k after two weeks below 200k are a return to a normally low level after two exceptionally low weeks.
Continued claims at 1.782m increased by 24k, after three straight declines with the decline two weeks ago being particularly steep , by 42k. The 4-week average for continued claims continues to fall.
