Strong U.S. retail sales, consumer sentiment data buoy economic outlook
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. retail sales in April recorded their biggest increase in a year as Americans stepped up purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter.
The jump in sales reported by the Commerce Department on Friday is a boost for the sector that has been hit by sluggish demand. It comes days after major retailers, including Macy's and Nordstrom, reported sales tumbled in the first quarter and lowered their full-year profit forecasts.
"Reports of the consumers' demise appear to be premature," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Retail sales surged 1.3 percent in April, the largest gain since March 2015, after dropping 0.3 percent the prior month. Excluding automobiles, gasoline, building materials and food services, retail sales shot up 0.9 percent last month after an upwardly revised 0.2 percent gain in March.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Core retail sales were previously reported to have gained 0.1 percent in March. Economists had forecast retail sales rising 0.8 percent and core retail sales gaining 0.3 percent last month.
Though the signs of an acceleration in consumer spending will be welcomed by Federal Reserve officials, they are probably insufficient for the U.S. central bank to raise interest rates next month as inflation remains tame.
A second report from the Labor Department showed its producer price index climbed 0.2 percent last month after slipping 0.1 percent in March. In the 12 months through April, the PPI was unchanged after dipping 0.1 percent in March. Continued...