U.S. Economy Enters Second Quarter With This Bad News
“Retail sales were very weak,” Cantor Fitzgerald interest rate strategist Justin Lederer told Bloomberg after the U.S. Department of Commerce released April’s figures. “It’s not a good start for retail sales for the second quarter.” And if retail sales began the current quarter weak, it is also likely that gross domestic product began the April-through-June period with little momentum, as well. In the first quarter of the year, GDP expanded an anemic 0.1 percent, the worst pace since the end of 2012.
Consumers were big spenders in the first quarter, propping up growth as they have for much of the recovery. But other sectors of the U.S. economy that have buoyed the recovery in recent quarters slumped in the early months of this year, dragging down growth substantially, with much of the hurt brought on by frigid winter weather. That reality left personal consumption expenditures as the single biggest boost to economic output in the first three months of the year.
However, consumers spent significantly less at malls and restaurants last month than they did in March, meaning receipts at those retailers were less. Reflecting that reality, retail sales amounted to just $434.6 billion, an increase of 0.1 percent. That growth, which reflects an equally meager pickup in consumer spending, represented a far smaller gain than analysts expected and a far more modest jump than March’s upwardly revised 1.5 percent.