U.S. Data Pulse: April Retail Sales: Prices boost retail sales

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U.S. Data Pulse: April Retail Sales: Prices boost retail sales

UpdateM

April retail sales: Prices boost retail sales

Retail sales were up both for the headline (up 0.5% m/m) and control group (up 0.5%).

Within the headline, sales of autos fell (down 0.4%), sales at gasoline stations were up

2.8%, and building material sales were up a tenth from March.

Among the control group, February and March sales were revised up a total of 40bps,

with the largest upward revisions coming from the sporting goods category. For the April

print, the strongest categories were sales at online stores, sporting goods and grocery

stores. Clothing stores reversed, and were down 1.5%. Restaurant spending was a

relatively strong 0.6%, the only services category in the retail sales print.

The print for retail control was stronger than our forecast and the difference is almost

entirely due to the upward revision in our estimate of control group prices after the CPI

print this week. And so, our takeaway is that the pace of real spending is still at the more

moderate pace that we have been expecting. With this print, our estimate of April real

spending is 0.1%m/m. We also initiate our 2Q real spending at 1.8% q/q saar. While we

think the tariff shock is largely behind us now, we expect more effects on goods spending

from the oil shock in coming months. Real spending decelerates this year, to 1.8% (4Q/4Q)

before stronger economic fundamentals lead to a re-acceleration in 2027. See our recently

published US Economics Mid-Year Outlook for more detail.

Exhibit 2: Retail control and its categories

Changes (m/m) in Retail Control and its components

Sptg Gds,

Furniture, Health & Hobby, Bk General

Retail Nonstore Home Furn, Food & Pers Care Clthg & Acc & Mus Merch Misc Stores