The weaker-than-expected increase in retail sales last month, reported by the US Commerce Department on Tuesday, may have reflected a moderate increase in auto sales, which some economists said was due to lower prices.
Automakers’ sales increased in April.
Sal Guaterie, chief economist at BMO Capital Markets in Toronto, said a contraction in real personal consumption in the United States necessitates a sharp decline in spending in the final two months of the second quarter.
Retail sales rose 0.4% last month, while March data was revised down slightly to show sales falling 0.7% instead of 0.6% as previously reported.
Economists polled by Reuters had forecast sales growth of 0.8%.
Rising retail sales, combined with strong job growth in April, suggest the economy is recovering in the spring after activity slowed in February and March.
Excluding autos, gasoline, building materials and food services, retail sales recovered 0.7% last month.
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