Retail sales increased 0.4%, the Commerce Department said Friday, and were 4.5% higher compared to a year ago. The unemployment rate in April was 4.4%, according to the Labor Department, matching its lowest level since 2001. Store sales rose for electronics and appliances by 1.3%, sporting goods, hobby, book and music by 0.6%, and health and personal care by 0.8%.
Retail control-group sales, which are used to calculate GDP and exclude the categories of food services, auto dealers, building materials outlets and gasoline stations, rose 0.2 per cent after a 0.7 per cent March gain that was the biggest since April 2016. Yet average hourly pay rose just 2.5 percent over the past year.
The U.S. Census Bureau's advance monthly report released earlier today indicates that total retail sales reached nearly $475 billion last month, a 4.5% increase over April 2016's $454.7 billion, but virtually flat compared to last month.
With motor vehicles and gas stripped out, sales were up 0.3%, after a 0.4% increase in March.
"While the interplay between consumer confidence and spending is hard to gauge, retail sales trends and recent consumer sentiment readings are consistent with a pickup in the pace of the economy in the coming months", NRF Chief Economist Jack Kleinhenz said in a blog posting.
Shares in JC Penney sank 10% after it became the latest department store chain to report disappointing results.
With consumer spending accounting for around two-thirds of all economic activity, that commensurate growth, or projected growth, is contingent on consumers being able to change behavior, or, in other words, consistently spend more.
Sales in a category that includes department stores, as well as general retailers such as Wal-Mart, fell 0.5 percent in April, the government said.
Consumer prices rebounded moderately in April as energy prices climbed back up after a sharp decline in March. "Yet, with April sales a bit weaker than anticipated, we are trimming our projected of annualized growth in real consumer spending during the second quarter from 3.4% to 3.1%".