- Prior was +0.9%
- The advanced April reading was +0.6%
- April retail sales ex autos +0.1% vs +0.7% expected
- Prior ex autos +1.4% (revised to +1.2%)
- Sales were up in five of nine subsectors
- Core sales excluding gas stations were down 0.7%
- Advanced May sales +1.0%
This is a poor report and highlights how hard gasoline price rises bit in April due to the Iran war. The decrease in core sales was led by
lower sales at food and beverage retailers (-2.0%) and general merchandise retailers (-1.7%). The largest increase in core retail sales came from building material and garden equipment and supplies dealers,
which increased 3.3% in April after decreasing 4.5% in March.
The entire gain in headline sales came from price, not activity. In volume terms, sales were flat — zero growth, which is what actually matters for GDP. The headline got its lift almost entirely from gasoline stations, where dollar sales jumped 5.1% even as the volume rose just 0.8%. Gasoline sales are up a staggering 22.8% year-over-year, almost all of it pump prices.
The silver lining in the report is that the advance reading for May was up 1.0%, which indicates that poor April weather could have restrained spending. The oil shock is also fading in June as crude prices sink.
The Bank of Canada is still likely to hike rates later this year as high prices bite but oil is going to be a factor in where the lands.
This article was written by Adam Button at investinglive.com.
