After showing back-to-back increases in the first two months of the year, retail sales showed a second consecutive monthly decline in April, according to a report released by the Commerce Department on Wednesday.
The report showed that retail sales fell 0.4 percent in April following a revised 1.3 percent decrease in March. Economists had expected sales to come in unchanged compared to the 1.2 percent decrease originally reported for the previous month.
While sales by motor vehicle and parts dealers edged up 0.2 percent, sales by electronics and appliance stores fell 2.8 percent and sales by gas stations fell 2.3 percent.
Excluding the modest increase in sales by motor vehicle and parts dealers, retail sales fell by a somewhat steeper 0.5 percent in April compared to a 1.2 percent decrease in March. Ex-auto sales had been expected to edge up 0.2 percent.
Noting that the increases in sales seen earlier this year were the most significant green shoots in the economic landscape, Chris Low, chief economist at FTN Financial, said, Unfortunately, it now looks as if they were killed by an early frost.
Back-to-back declines in sales in March and April throw the economic recovery into doubt, Low added.
Along with the decreases in sales by electronics and appliance stores and gas stations, the drop in retail sales also reflected notably lower sales by food and beverage stores, furniture and home furnishings stores, and clothing and accessories stores.
At the same time, restaurants and bars, sporting goods stores, health and personal care stores and building materials and supplies dealers reported modest increases in sales.
Peter Boockvar, equity strategist at Miller Tabak said, All the green thumb gardeners out there can count as many shoots as they want, but the U.S. economy still comes down to the activities of the U.S. consumer.
However, Boockvar noted that the consumer is still retrenching, paying down debt, saving and getting their credit lines cut.
This is a long term-process, and with a still difficult labor market, it won't change anytime soon, Boockvar added.
In related news, retail earnings were kicked off by a report from Macy's (M), which reported a first quarter adjusted loss of $0.16 per share. Wall Street analysts had expected a slightly wider loss of $0.20 per share.
Other retailers set to report include Wal-Mart (WMT), J.C. Penney (JCP) and Abercrombie & Fitch (ANF), which will report their results over the next two days.
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