US retail sales pause, record saving seen backing spending

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US retail sales pause, record saving seen backing spending

US Commerce Department said on Friday that US retail sales growth had surprisingly paused in April as supports from massive Government stimulus seemed to be waning, though analysts were anticipating another wave of high-tide in spending in coming months riding on the back of a record consumers’ saving alongside a broader reopening of US economy.

Aside from that, US Commerce Department’s retail sales data had also unveiled that US retail sales in March were revised upwards to 10.7 per cent from a prior reading of 9.7 per cent, laying off the groundwork of a strong consumer spending into the second quarter, nonetheless, US retail sales in April had widely missed analysts’ estimates as Americans were reportedly shifting their spending from goods to services likes of restaurants alongside bars following an acceleration in vaccination drive in the country.

US retail sales stall in April

In tandem, according to US Commerce Department data published earlier in the day, US retail sales remained unchanged last month following a nearly 10.7 per cent upsurge in March, the second-largest increase in retail sales on record, missing an analysts’ estimate of a 1 per cent increase in retail sales in April.

However, on a year-on-year basis, US retail sales surged 51.2 per cent in April. Nonetheless, latest stagnation in US retail sales last month came forth as a 2.9 per cent increase in motor vehicle purchases had been eclipsed by a 5.1 per cent slump in spending on clothing stores, while there were wide-ranging declines in spending in sporting goods, hobby, musical items and book stores with spending in building materials and online retail sales being slandered by 0.4 per cent and 0.6 per cent respectively.

However, sales in electronics and appliances soared by 1.2 per cent and consumers’ spending in restaurants and bars rose 3.0 per cent in April compared to the same time a year earlier. Meanwhile, addressing to a likely gyration towards services from goods, a chief international economist at ING in New York, James Knightley said, “We are going to see more and more people switching a greater proportion of their spending away from 'things', which are picked up by retail sales, towards 'experiences' which are reflected in broader consumer spending.