April retail sales are strong, reports Commerce and NRF

Amid ongoing 40-year highs for inflation, United States April retail sales saw increases, according to data issued today by the United States Department of Commerce and the National Retail Federation (NRF).

Commerce reported that April retail sales—at $677.7 billion—saw a 0.9% increase over March and an 8.2% annual gain. It also noted that total retail sales, from February 2022 through April 2022, increased 10.8% compared to the same period a year ago. Based on its Commerce’s data, retail sales have seen annual gains every month going back to March 2020.

Retail trade sales were up 0.7% annually, with gasoline stations up 36.9%, and food services and drinking places up 19.8%.

NRF said that in its calculation of retail sales, which excludes automobile dealers, gasoline stations, and restaurants, to focus on core retail, pointed to sales being up 0.9% in April on a seasonally adjusted basis from March, while rising 6.4% on an unadjusted basis annually. And it added that NRF data showed a 7.1% unadjusted annual gain on a three-month moving average as of April.

“April retail sales demonstrate consumer strength and willingness to spend despite persistent inflation, supply chain constraints, market volatility and global unrest,” NRF President and CEO Matthew Shay said in a statement. “While consumers are facing higher prices, they are preserving their budgets by shopping smart. Retail businesses are also facing increased costs like higher energy bills and rents as well as the cost for goods, transportation and wages. Despite already tight margins, retailers remain committed to their customers and are doing everything they can to absorb these costs to keep products affordable. With the Federal Reserve already raising interest rates, the Biden administration and Congress have an opportunity to provide targeted relief to American households by lifting the China tariffs, passing legislation to fix the supply chain and addressing immigration reform to ease the tight labor market.”

NRF added that April retail sales saw gains in two-thirds of the categories it tracks on a monthly and yearly basis, paced by online sales, clothing, and grocery stores. Specifics from key sectors include:
-Online and other non-store sales were up 2.1 percent month over month seasonally adjusted and up 11.3% unadjusted year over year;
-Clothing and clothing accessory stores were up 0.8% month over month seasonally adjusted and up 11.2% unadjusted year over year;
-Grocery and beverage stores were down 0.2% month over month seasonally adjusted but up 8.9% unadjusted year over year;
-General merchandise stores were up 0.2% month over month seasonally adjusted and up 3.7% unadjusted year over year;
-Health and personal care stores were up 0.7% month over month seasonally adjusted and up 1.2% unadjusted year over year;
-Furniture and home furnishings stores were up 0.7% month over month seasonally adjusted and up 0.9% unadjusted year over year;
-Building materials and garden supply stores were down 0.1% month over month seasonally adjusted and down 1.2% unadjusted year over year;
-Sporting goods stores were down 0.5% month over month seasonally adjusted and down 3.1% unadjusted year over year; and
Electronics and appliance stores were up 1% month over month seasonally adjusted but down 4.7% unadjusted year over year

“The worrying thing is that the impact of inflation and the fallout for retail is not immediate; it builds over time,” wrote Neil Saunders, Managing Director of GlobalData, in a research note. “Most households are still in the phase of being able to cope with the price increases that have come through to-date. However, if inflation remains elevated over the balance of this year, the effects will become much more pronounced, and we could see retail volumes deteriorate further. There are also some worrying initial signs that consumer confidence is starting to fade with sales at big ticket retailers like automotive, home improvement, and electronics chains posting negative growth, and others like furniture virtually flat over the prior year. With inflation present in all these areas, it suggests volumes are very negative. Of course, some of this is related to the winding-down of pandemic-demand and some is also a consequence of shortages from supply chain issues. However, these factors do not account for all the moderation which shows consumer sentiment about the economy is also weighing on buying decisions.”