US Retail sales were unchanged in April, following a 1.1% m/m gain in March (revised up from 0.9%). Motor vehicle sales fell by 0.4% m/m, gasoline station sales fell by 0.7% m/m, while building material sales increased by a modest 0.3% m/m.
"The continuing weakness of retail sales in April brings into question our working assumption that the soft patch through the winter months was largely due to the unseasonably cold temperatures in the Northeast." said Capital Economics
Excluding vehicles, gasoline and building materials, so-called control group sales were also unchanged last month. Admittedly, that followed a 0.5% m/m rebound in March, which was slightly bigger than previously estimated. But February's decline was also revised up, so the net impact on first-quarter GDP will be close to zero.
Evidence still appears to suggest an acceleration in consumption growth is coming. Consumer confidence is close to multi-year highs, employment growth rebounded in April, the savings rate looks quite high and the employment cost index points to a clear acceleration in wage growth.
"Alongside the surge in long-term interest rates over the past few weeks, the ongoing softness of retail sales is another reason to believe that the Fed will delay the first rate hike until September at least." adds Capital Economics
