April retail sales rebound from sluggish first quarter

Coming off of a very sluggish first quarter, retail sales in the month of April showed somewhat of a bounce back in tandem with signs of spring, according to data issued today by the United States Department of Commerce and the National Retail Federation.

Commerce reported that April retail sales at $453.4 billion were up 1.3 percent from March and up 3.0 percent annually. And total retail sales from February through April were up 2.8 percent compared to the same period last year.

The NRF reported that retail sales saw a 3.5 percent annual increase in April, and excluding automobiles, gasoline stations and restaurants, seasonally-adjusted retail sales in April were up 0.7 percent compared to March, which the NRF said was based on its calculations leveraging Commerce’s data.

“Today’s retail sales data suggests that consumer activity, the primary driver of economic activity, has not lost its momentum,” NRF Chief Economist Jack Kleinhenz said. “This sets the stage for an upturn in economic growth in the second quarter and should be encouraging for Federal Reserve policymakers as they contemplate interest rate adjustments. “This is reflective of growth in a volatile and disrupted retail industry, where consumer engagement is evolving to reflect both new economic and changing market realities.”

Earlier this year, the NRF said it is calling for 2016 retail industry sales, excluding automobiles, gas stations, and restaurants, to see a 3.1 percent annual increase.

While this estimate comes in higher than the 10-year average of 2.7 percent, it falls short of the NRF’s 2015 estimate of 4.1 percent. The Washington, D.C.-based organization also said it expects non-store sales to grow between 6-9 percent in
2016.

The NRF offered up some other metrics that it maintains point to a strong 2016 on the retail sales front, including:
-2016 economic growth to be in the 1.9 percent-to-2.4 percent range; and
-an estimated 190,000 new jobs added per month, which is off from 2015 but consistent with a growing labor market

Even though retail sales activity saw gains in April, that has not been fully reflected in the freight transportation and logistics sectors, which remain hampered by low demand and declining volumes to a large degree.

Chris G. Christopher, Jr., Director of Consumer Economics, IHS Global Insight, wrote in a research note that April’s retail sales growth represents a step in the right direction.

“In April, consumers came out swinging and opened their wallets on most retail goods such as autos, furniture, electronics, clothing sporting, grocery, restaurants, and many discretionary items,” he wrote. “The lackluster growth in retail sales in the first-quarter was a result of a sudden rush in the direction of cautious behavior due to concerns over the stock market. As the stock market made a return, consumers came back with a vengeance.”