U.S. Retail Spending Unchanged in April -- 2nd Update
May 14 2021 - 9:54AM
Dow Jones News
By Amara Omeokwe
Shoppers extended stimulus-induced spending in April,
maintaining a level of retail sales from the prior month with
increased expenditures on autos and dining out.
Retail sales -- a measure of purchases at stores, at restaurants
and online -- overall were unchanged last month from March, the
Commerce Department reported Friday. That kept spending at the same
pace set by March's upwardly revised 10.7% advance, which was
influenced by government-stimulus money for most households.
"Flat sales going from March to April is still pretty strong.
The level of sales is much higher than before the pandemic," said
Scott Brown, chief economist at Raymond James Financial. "It's
still a sign that consumer spending is pretty healthy at this
point."
Sales were up 2.9% at auto and parts dealers, where shortages in
available cars have driven up prices, and 3% at restaurants and
bars, a positive sign for the hard-hit industry as the U.S. economy
more fully opens.
The leisure and hospitality sector, including restaurants, added
331,000 jobs in April, accounting for much of the country's job
creation last month. Commerce's Friday report showed sales at
restaurants and bars in April were just 2% lower than their levels
in February 2020, just before the pandemic took hold in the
U.S.
Shoppers otherwise last month cut spending across a wide range
of retail categories, such as clothing and accessories, furniture,
and sporting goods. Sales at general merchandise stores, such as
big-box retailers, and online retailers also fell.
Separately, industrial production in the U.S. expanded in April
amid strong demand for goods, but the sector continued to be
constrained by supply-chain bottlenecks.
Industrial production -- a measure of factory, mining and
utility output -- rose at a seasonally adjusted 0.7% in April
compared with March, the Federal Reserve said Friday. That was
broadly in line with economists' expectations.
Manufacturing output, the biggest component of industrial
production, increased by 0.4% in April from the prior month. Motor
vehicle and parts production weighed on the overall figure, falling
by 4.3% on month, as the global shortage of semiconductor chips has
led to plants running at less than full capacity.
Americans sharply increased spending on goods earlier in the
pandemic, as people stayed at home amid lockdown orders and social
distancing efforts aimed at combating the virus's spread.
Economists expect spending for services, such as in the leisure and
hospitality industry, to pick up as more people become vaccinated
and as establishments in the services sector are allowed to more
fully operate.
"All of that leads to services spending coming back online in a
really big way," said Tim Quinlan, senior economist at Wells
Fargo.
The surge in retail spending earlier in March came as the
government distributed hundreds of billions in direct cash payments
to households. That was similar to a large jump in retail sales
during January, following a separate round of direct payments
authorized by Congress at the end of 2020.
The stimulus checks "burned a hole through consumers' pockets in
those months and contributed to big, big surges" in retail sales,
Mr. Quinlan said. "The immediate sugar high from the stimulus could
be wearing off."
Xavier Fontdegloria contributed to this article.
Write to Amara Omeokwe at amara.omeokwe@wsj.com
(END) Dow Jones Newswires
May 14, 2021 10:39 ET (14:39 GMT)
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