Retail Sales Edge Up; Business Spending Flat
- May 14, 2013
The Census Bureau reported on Monday that U.S. retail sales were up 0.1 percent month over month in April, adjusting for seasonal variations and holidays, but not price changes. That’s not much growth, but it was better than expected, and an improvement compared with March, when sales dropped a revised 0.5 percent month over month. Compared with a year earlier, retail sales were up 3.7 percent in April 2013.
Take auto sales out of the equation, and retail sales (including restaurants) edged down 0.1 percent from March to April 2013, but were up 2.8 percent compared with a year earlier. Motor vehicles sales were up 1 percent for the month, after a drop of 0.6 percent in March. Gas sales dropped 0.6 percent for the month, mainly because the price of gas was down in most parts of the country.
In fact, the drop in the price of gas probably had the effect of balancing out the negative impact of the hike in payroll taxes beginning in January. The solidity of the housing recovery is also buoying consumers’ propensity to spend. The biggest gains for the month were at general merchandise stores, up 1 percent (meaning Wal-Mart more than anywhere else, even though the retail giant doesn’t publish monthly numbers any more), and restaurant sales, up 0.8 percent.
Businesses Spending Doesn’t Budge
Consumers might have bought a little more in April, but businesses didn’t. The Census Bureau also reported on Monday that business inventories were just about flat in March, with many U.S. businesses not bothering to restock inventories.
The report said that the amount of goods on hand compared to sales inched up to 1.29 in March from 1.28 in February, a ratio that hasn’t moved much since mid-2012. The figure represents how many months it would take for a business operation to burn through its inventory.
Some businesses allowed their inventories to shrink more than others. Retailers in particular didn’t restock as much, with retail inventories declining 0.5 percent in March, perhaps on the assumption that consumers spending would be weak. Specifically, car dealers, furniture stores and clothiers all let their inventories shrink during the month.
Wall Street had a mixed day on Monday, with the Dow Jones Industrial Average off 26.81 points, or 0.18 percent. The S&P 500 virtually broken even and the Nasdaq was up 0.1 percent.