Economists surveyed by Reuters believe that U.S. retail sales outside the auto sector regained some strength in April, helped by Easter holiday shopping and moderately stronger consumer confidence.
We suspect that the late timing of Easter (in April) hurt sales in March, so that some positive payback is due in April, IHS Global Insight wrote in its economic outlook for the week.
Excluding autos, retail sales likely rose 0.2 percent after falling 0.9 percent in March, according to a survey of 66 economists who noted consumers also benefited from payroll tax cuts last month that may have been used for shopping.
But including autos, sales are forecast to have been flat in April after dropping 1.2 percent in March, a slightly larger survey that included 71 economists found.
Auto sales have been in a tailspin for months as payrolls shrink and the problems of domestic automakers worsen, including Chrysler LLC's recent descent into bankruptcy.
Retail sales are monitored as a proxy for U.S. consumer spending, which accounts for two-thirds of economic activity.
One issue that economists are watching closely is whether consumers will alter their spending habits, more than temporarily, by extending the recent trend to put more into savings and spending less at shopping malls.
There is no question that households have already begun to ratchet up their savings and deleverage, but this process will undoubtedly take years, not months, RBS Securities Inc. wrote in research notes.
The Commerce Department will release its retail sales report at 8:30 a.m. EDT on Wednesday, May 13.
The following is a selection of comments from economists:
Forecast: sales -0.1 percent
ex-autos +0.4 percent
Outside of autos, the retail sales report should paint a brighter picture of the consumer. We think that sales will continue to edge higher amid rising consumer confidence, but at a sluggish pace, given the massive wealth shock and feeble labor market.
IHS GLOBAL INSIGHT
Forecast: sales +0.3 percent
ex-autos +0.7 percent
A strong month-to-month gain in chain store sales signals solid growth in April sales at general merchandise and specialty stores after a disappointing March. The fiscal stimulus package, large tax refunds, a big cost-of-living adjustment for Social Security, and declining energy prices are supporting real household incomes and spending.
Forecast: sales +1.1 percent
ex-autos +1.2 percent
Department and luxury stores continue to be hardest hit as consumers stick to necessities. Additionally, prices at the pump saw a slight increase from a month ago. The likely bottoming in retail sales combined with the sharp reduction in business inventories are preconditions to the recovery.
(Polling by Bangalore Polling Unit)
(Reporting by Nancy Waitz, Editing by Walker Simon)