Retail Sales Up For April, Auto Sales Lag
PLANO, Texas -- Retails sales were up in April, surprising analysts and economy watchers, posting a bump of 0.5% for the month. But that figure didn't include the sales of automobiles, which fell 0.2%, offsetting the 0.2% increase from March.
Brian Turner, director of advisory services for Southwest Corporate Advisory Services, noted that the "centerpiece of the Federal Open Market Committee's recovery plan, consumer spending, is not forecast to grow at an annual rate of 0.7% for this quarter, down from a 1.0% pace in the first quarter of 2008 and the smallest gain in almost 17 years."
It is hoped, however, that many consumers will succumb to the temptation of spending those government rebate stimulus checks that are now being received, rather than use the money to pay debt or put it in savings. Spending is forecast then to rebound a bit, growing to 2.5% in the third quarter.
NAFCU Economist Katrin O'Connor noted that sales at building supply and electronics stores posted strong, unexpected gains in April. "This strength, however, is not expected to last, with housing continuing to put a significant drag on economic growth." Consumers seemed to be going for bargains at the big retailers to stretch their paychecks.
O'Connor was mindful of the anticipated rebate check bounce, but said any uptick would be impacted by how much will go to paying the higher cost of gas and food.