In a sign of continued weakness in the retail sector, the Commerce Department released a report on Wednesday showing that U.S. retail sales were unexpectedly flat in the month of April.
The report said retail sales were virtually unchanged in April following an upwardly revised 1.1 percent increase in March.
Economists had expected retail sales to edge up by 0.2 percent compared to the 0.9 percent growth originally reported for the previous month.
The disappointing reading on retail sales was partly due to a pullback in sales by motor vehicle and parts dealers, which fell by 0.4 percent in April after surging up by 2.9 percent in March.
Excluding the drop in auto sales, retail sales inched up by 0.1 percent in April, although that was still well short of the 0.5 percent increase expected by economists.
The report showed a 2.2 percent drop in sales by department stores as well as notable decreases in sales by furniture and home furnishings stores and gas stations.
The decreases were offset by sales growth at health and personal care stores, sporting goods, hobby, book and music stores, and food services and drinking places.
The report said core retail sales, which exclude autos, gasoline, and building materials, were also flat in April after climbing by 0.5 percent in March.
James Knightley, an economist at ING Bank, said, “We still aren’t really seeing the big recovery that was anticipated in the wake of the weather depressed first quarter.”
“This just really reinforces the view that a June hike isn’t happening and that September looks the more probable start point,” he added.
The Commerce Department noted that total retail sales in April were up by 0.9 percent compared to the same month a year ago, reflecting a slowdown from the 1.7 percent annual growth seen in March.
The material has been provided by InstaForex Company – www.instaforex.com