Sales at US retailers barely rose in April as the boost from an unseasonably warm winter faded, pointing to some loss of momentum in consumer spending early in the second quarter. However, details of the Commerce Department report indicated underlying firmness in demand. That, and other reports on Tuesday showing a strong rebound in manufacturing activity in New York State this month and sentiment among home builders at a five-year high, calmed concerns the economy was stalling.
In addition, retreating gasoline prices, which put a lid on broader inflation pressures last month, should free money for discretionary spending by households in the months ahead. "The economy continues to grow at a decent clip, but there are still a lot of risks coming from overseas," said Omair Sharif, an economist at RBS in Stamford, Connecticut.
Retail sales edged up 0.1 percent in April, held back by a decline in receipts from building materials and clothing stores. That was the smallest gain since December. Other data showed manufacturing remained resilient, with a gauge of factory activity in New York state bouncing higher this month as new orders and shipments rose. The New York Federal Reserve said its Empire State general business conditions index jumped to 17.09 in May from 6.56 in April, outpacing economists' expectations of 8.50.
Separately, the National Association of Home Builders/Wells Fargo Housing Market index rose to 29, the highest reading since May 2007, from 24 in April. Unusually warm weather pulled forward sales into January and February, resulting in first-quarter consumer spending rising at its fastest clip in more than a year. Consumer spending rose at a 2.9 percent annual rate.
Elsewhere in the report, auto sales increased 0.5 percent after rising 0.2 percent in March. Excluding autos, sales ticked up 0.1 percent after advancing 0.8 percent the prior month. Sales at gasoline stations fell 0.3 percent as prices at the gasoline pump retreated from recent highs around $4 a gallon. Sales had increased 1.0 percent the prior month.