May 15 (Bloomberg) -- Retail sales in the U.S. rose in April at the slowest pace of the year, showing unseasonably mild weather and pre-Easter shopping may have pulled consumers to stores the prior month.
The 0.1 percent gain followed a 0.7 percent increase in March, Commerce Department figures showed today in Washington. Economists projected an advance of 0.1 percent, according to the median forecast in a Bloomberg News survey.
Categories like building materials, clothing and department stores dropped in April as the weather-induced gains of the first three months of 2012, the warmest on record, faded. Weaker employment growth will probably also make it more difficult for households to match last quarter’s pace of spending, which was the fastest in more than a year.
“The consumer is holding up,” said Neil Dutta , an economist at Bank of America Corp. in New York who correctly forecast the sales gain. “The key thing here is to determine to what extent the weather had an effect, and it’s pretty clear if you look at the components there was some weather impact.”
The cost of living was little changed in April as fuel prices dropped, and manufacturing in the New York region expanded this month at a faster pace than projected, other reports showed.
Consumer Prices
Unchanged consumer prices matched the median forecast of economists surveyed by Bloomberg News and followed three straight gains that included a 0.3 percent rise in March, Labor Department data showed.
The Federal Reserve Bank of New York’s general economic index increased to 17.1 this month from 6.6 in April. The median estimate in a survey of Bloomberg economists called for an increase to 9. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut. The last negative
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.6 percent to 1,342.6 at 8:46 a.m. in New York as economic growth in Germany helped the euro area avoid its second recession in three years.
Retail sales were projected to rise after a 0.8 percent advance previously reported for March, according to the Bloomberg survey. Estimates from the 80 economists surveyed ranged from a decrease of 0.3 percent to a gain of 0.7 percent.
Most Categories Rise
Nine of 13 major categories showed gains last month, led by auto dealers, furniture stores and non-store retailers that included online merchants.
Part of the slowdown may reflect seasonal events that pulled sales into the previous month. The average temperature in March was the warmest on record in the U.S., and Easter fell on April 8 compared with April 24 the year before.
Demand at building-material stores dropped 1.8 percent, the biggest decrease since January 2011.
Spending decreased 0.7 percent at clothing stores and 0.1 percent at general merchandise stores.
Sales climbed 0.5 percent at automobile dealers, after a 0.2 percent increase the prior month, today’s report showed. The results are in sync with industry figures. Cars and light trucks sold at a 14.4 million annual rate in April, up less than 100,000 from the prior month, according to data from Ward’s Automotive Group.
Purchases excluding autos increased 0.1 percent, the retail sales report showed. They were projected to rise 0.2 percent, the survey median showed.
The retail sales category used to calculate gross domestic product, which excludes sales at auto dealers, building material stores and service stations, increased 0.4 percent after a 0.5 percent increase in the previous month.
Industry data showed retailers’ same-store sales trailed analysts’ estimates in April for the first time since November. Sales at Target Corp., the second-biggest U.S. discount chain, rose 1.1 percent, below the 2.9 percent projection.
Consumer spending, which accounts for 70 percent of the economy, grew at a 2.9 percent annual rate last quarter, the most since the final three months of 2010, according to data from the Commerce Department.
Sustaining such a pace of purchasing may be more difficult with weaker job growth. Employers took on 115,000 workers last month, the fewest since October, a Labor Department report showed May 4. The jobless rate also declined as people left the work force.
‘Tough’ Environment
“The consumer environment has been and continues to be tough,” G. Price Cooper, chief financial officer of restaurant chain Texas Roadhouse Inc., said during a May 9 investor conference. “It has been that way for a couple of years. Fortunately, I guess from the industry perspective, we’ve seen a pretty decent trend in sales over the last year.”
Less expensive fuel will free up some of consumers’ cash for other goods and services. The average price of a gallon of regular gasoline fell to $3.73 on May 14 from a peak this year of $3.94 in early April, according to AAA, the nation’s largest auto club.
A more optimistic consumer could also help spur demand. The Thomson Reuters/University of Michigan preliminary sentiment index for May climbed to the highest level in four years, a report showed last week. For the first time since data began in 1978, the index advanced for nine consecutive months.
