A drop in receipts at service stations restrained the gains. The decrease probably reflected lower gasoline prices because the data aren’t adjusted for inflation.
A gallon of regular gasoline at the pump averaged $3.55 in April, lower than March’s $3.69. The price peaked at a four- month high of $3.79 on February 26, according to AAA, the biggest U.S. auto group.
The figure used to calculate gross domestic product, which excludes autos, gasoline and building materials, climbed 0.5% after a 0.1% increase in the previous month. The data for March and February were revised up.
Retailers that sell discounted name-brand clothing and home goods were among those showing the best results. Same-store sales jumped 8% last month from the same time in 2012 at TJX, the owner of T.J. Maxx and Marshalls stores, while Ross Stores Inc. had a 7% gain. Results at both chains exceeded analysts’ forecasts.
May is “off to a strong start,” Sherry Lang, senior vice- president of global communications at Framingham, Massachusetts- based TJX Cos., said on a May 9 sales call. “It was nice to see strength in apparel as well as home categories across the board.”
Chains that didn’t do so well included L Brands Inc. The operator of the Victoria’s Secret lingerie chain reported a 2% rise in April sales at stores open at least a year, missing analysts’ average estimate.
Household spending, which accounts for about 70% of the economy, will grow at a 1.8% annualized rate this quarter after expanding at a 3.2% pace in the first three months of the year, the most since the end of 2010, according to the median forecast of economists survey by Bloomberg this month.
Economists marked down forecasts on expectations an increase in taxes would start to bite. At the beginning of 2013, the payroll tax reverted to its 2010 rate of 6.2% after holding at 4.2% for two years.
Advances in equity prices, which mainly benefit wealthier Americans, are helping to underpin consumer spending. U.S. stocks are in the fifth year of a bull market amid better-than- forecast corporate earnings and record stimulus by the Federal Reserve.
Retail sales may also keep getting help from the housing market. Residential real-estate prices rose in the year ended in February by the most since May 2006, according to the S&P/Case- Shiller index of house values in 20 cities.
Better job growth would help spur purchases and put more of the 11.7 million unemployed Americans back to work. Payrolls expanded by 165,000 workers in April after a 138,000 gain in March, according to the Labor Department. They rose by 236,500 a month on average from November through February.
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