US retail sales fall

A government report released today shows that US retail sales have declined by as much as 0.2 percent in April.

During the period, consumers have had to tighten their purse strings and the area hardest hit are the sales of gas guzzling sport utility vehicles.

The steep drop experienced in vehicles sales during the month dragged down overall retail sales, although the retail industry suffered across the board.

The government report has showed that purchases at car dealerships and parts stores have fallen by 2.8 percent, whilst figures from the within the industry itself paint a similarly gloomy picture. Cars and light trucks sold at an annual pace of 14.4 million in April, which is the lowest for over ten years.

Despite this, core retail sales increased above predictions by 0.5 percent.

Julia Coronado, the senior U.S. economist at Barclays Capital in New York, has said that excluding car sales the fact that core retail sales were quite strong, indicates that consumer confidence has remained buoyant and is more resilient than expected.

The report has meant that analysts and economists predictions may rise for the forthcoming periods as consumer spending is forecast to grow at an annual rate of 0.5 percent this quarter.

Further optimism is expected, as the benefits of the $117 billion in tax-rebate which was part of the government stimulus plan are spent, which will further boost the economy.

Story link: US retail sales fall