US retail sales increases, but by less than expected, hinting at a slowing pace of economic activity.
Retail sales in the United States have increased month-on-month for April by 0.4%, data from the United States Census Bureau has confirmed. This is less than expected, as most analysts were forecasting an increase of 0.8%.
Overall sales in April climbed to $686.1 billion.
There was also a rise in sales in April this year in comparison to the same month last year, with an increase of 1.6% of goods sold.
Total sales between February and April also saw growth of 3.1% from the same period last year.
The figures are far more positive than those in February and March when the retail sector contracted by 0.7% both times.
Originally the bureau’s data found the retail sector tightened by 0.6% from February to March, but a revision of that data discovered that the picture was worse.
Non-store Retailers Lead the Way
Non-store retailers celebrated an 8% rise in sales from April last year, while food
services and drinking places were up 9.4%.
The bureau’s data found that the most significant rises in sales from March to April were again from non-store retailers, building materials, and motor vehicle and parts dealer outlets.
Non-store retailers’ sales grew by the biggest margin, increasing to $112.6 billion, in contrast to $111.3 billion in sales in March.
Overall, the 0.4% figure for April’s retail sales will come as a disappointment to many analysts, who believed that there would be a bigger rise in retail business.
Data Could Reflect Inflation Fall
The figures for April may be a result of slowing inflation.
Last week the Bureau of Labor Statistics revealed that inflation had fallen year-on-year in April for the tenth consecutive month, to 4.9%.
Purchasing power has also been increased due to the 253,000 extra jobs that were created in April, an increase on the 165,000 more vacancies that were filled in March.
The New York Federal Reserve’s latest Quarterly Report on Household Debt and Credit discovered that total household debt rose by $148 billion, or 0.9%, to $17.05 trillion in the first quarter of this year.
However, mortgage balances climbed upwards by $121 billion to $12.04 trillion at the end of March, as the interest rate raising cycle continued.
June Interest Rate Decision Huge
Inflation is still too high for the Federal Reserve’s liking, and its Federal Open Market Committee will meet and reveal the next interest rate decision on 14th June.
At its last meeting on 3rd May it was hinted that there could be a policy adjustment from the continuing direction of raising rates to calm inflation.
However, Richmond Federal Reserve President Thomas Barkin said that he is far from convinced that inflation is on course for a steady decline back to the government’s 2% target. Barkin also suggested that monetary policy needed to have more impact on rising prices, meaning more interest rate increases.
It is anticipated that the world’s most powerful economy will enter a recession this year.
Deputy Treasury Secretary Wally Adeyemo said that this would certainly happen if negotiators cannot agree on the increase of the current $31.4 trillion debt ceiling, which could lead to the United States defaulting on its debts.
US Dollar Gains, Stock Market Mixed
The US Dollar enjoyed a good week following the announcement that inflation had fallen yet again. After the retail sales data were released, the US Dollar rose 0.26% against the Japanese Yen, with the USD/JPY currency pair trading as high as ¥136.30.
The greenback also fared well against the British Pound, with a 0.20% rise there.
There was more mixed news in stock markets, as the S&P 500 Index fell by 0.32%
While the Nasdaq 100 Index increased by 0.09%.