WASHINGTON: Despite rising gasoline prices, Americans increased their spending early in the spring, signaling modest wage gains, and the recent tax reform helped boost the economy.
Retail sales – a measure of spending in stores, online shopping sites and restaurants – rose a seasonally-adjusted 0.3% in April from the previous month, the Commerce Department said Tuesday. This growth was largely broad based and also stopped without gasoline and cars. Both the food and beverage and apparel and accessories retail businesses posted the largest sales growth since last year. A weak point was spending on restaurants and bars, which fell by 0.3% since March.
Analysts had feared that rising gas prices would curb consumer spending in the near future. The average national price for a gallon of regular gasoline was $ 2.76 in April, nearly 1
But without gasoline and cars, spending in March still rose 0.3%, indicating moderate pay increases and larger paychecks in the tax reform in late 2017. Consumers should make more purchases.
"It appears that even with energy prices, consumers had the will to pay for non-energy products," said
US economist at JPMorgan Chase
April's surge in spending followed a stronger than expected month of spending growth in March, a relief to analysts who feared consumer spending would slow in late winter. Economic growth is slowing.
The US economy lost some momentum in the first quarter, partly due to sluggish consumer spending in the winter, but economists expect general growth to pick up in the coming quarters. Such spending is the main driver of the economy and accounts for more than two-thirds of the country's total measured total output.
Macroeconomic Adviser forecasters forecast growth of 2.9% for the second quarter after the retail sales report was released In the first months of 2017, the economy reached a growth rate of 2.3%.
Along with other retailers, some grocers have reported sales increases in recent months, though many had to keep prices low to drive consumers to their stores. The sale of grocery stores rose 0.5% month-on-month in April, up 3.3% year-on-year
Chairman and Co-President of
Natural Groceries by Vitamin Cottage
Inc., a Colorado-based chain that saw sales increase in the recent financial period after using federal tax laws to lower its cost of goods.
Compared to the previous year, retail sales increased by 4.7% in April. Expenditure continued to exceed inflation and the Labor Market PMI rose by 2.5% in April. In the longer term, private consumption was supported by a falling unemployment rate, which stood at 3.9% in April. Consumer confidence has remained high in recent months, helped by sustained employment growth and broader economic growth.
-Heather Haddon in Chicago has contributed to this article.
Write to Sharon Nunn at [email protected]