Total retail and food sales stalled in April in the face of rising prices and the absence of $1,400 stimulus checks that fueled a record jump in March.
According to the Commerce Department’s latest reading on the broadest measure of the U.S. economy, sales for April were unchanged from an upwardly revised 10.7 spike in March. Excluding food and fuel, retail sales on their own fell 0.3 percent.
Economists had been expecting a month-on-month decline in the sales rate to roughly 1 percent, in hopes that the key retail sector was showing signs that it could sustain continued expansion on its own, but the lower than expected data paint a far more tenuous recovery picture.
Clothing Craters
Looking inside the report released Friday (May 14), the Clothing and Accessories category delivered the biggest drag on the full number, with a 5.1 percent decline in April after posting a sector-leading 23 percent pop the month before.
Other notable laggards include a 4.9 percent decline in General Merchandise as well as a 3.6 percent retreat in the Sporting Goods, Hobby, Musical Instrument, & Book Store category following an unprecedented 24 percent jump in March.
So-called Non-Store sales, which consist mostly of eCommerce, were down 0.6 percent for the month after rising almost 5 percent in March.
On the plus side, Food & Drinks rose 3 percent, Motor Vehicles and Parts increased 2.9 percent while Electronics & Appliance sales advanced by 1.2 percent after spiking 17.5 percent in March.
The Year Ago Reminder
Taking a more macro view of how far things have come over the past year, the Commerce Department said the latest April tally of $620 billion in monthly sales reflects a 51 percent increase from the pandemic lockdown lows experienced last April.
Further underscoring how bad things were at this time last year, the new numbers show that Retailers ex-Food and Auto have bounced back 46 percent, with categories like Clothing & Accessories up over 725 percent, followed by a nearly 120 percent rebound in Food Services And Drinking Places.
That said, the sequential or month-on-month numbers are the trend that economists and retail executives watch most closely, and are what they base many of their forecasts and purchasing decisions off of.
Prior to the report, numerous brick-and-mortar businesses have reported improving momentum in foot traffic as the improving COVID and vaccine statistics, along with better seasonal weather, have been enticing more people to leave their homes to shop and eat.
However, with three rounds of stimulus checks over and spent and enhanced unemployment benefits starting to decline amid increased scrutiny, the buying power at the lower end of the economic scale continues to face challenges.
It’s a developing scenario that economists and analysts will be looking to get fresh insight on from sector leaders such as Walmart, which will report its latest earnings results Tuesday.
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