US retail sales saw their biggest rise for more than a year in April, largely because of a surge in car sales.
Overall
retail sales grew by 1.3% last month compared with March, according to
the US Commerce Department - the strongest gain since March 2015.
Car sales climbed by 3.2%, a sharp reversal from the 3.2% fall recorded in the previous month.
March's total retail sales were better than previously reported, falling by 0.3% not 0.4%.
When
cars, petrol, building materials and food services are stripped out
"core retail sales" rose by 0.9% in April. Analysts had forecast a 0.3%
gain.
"The numbers came in much stronger than we expected," said Peter Cardillo chief market economist at First Standard Financial.
"That will help alleviate the market's concerns over retail. The number also puts the rate hike back on the table," he added.
Sales grew in most retail sectors, except building materials and garden equipment.
Non-store retailers, which include online and catalogue businesses,
were up 2.1%, clothing rose 1% and even the troubled department store
sector edged up by 0.3%.
This slight improvement comes at the end of a week in which four department stores have published disappointing results.
Macy's, Kohl's, Nordstrom and J C Penney have all reported a fall in sales.
Like for like sales at J C Penny fell 0.4% in the first quarter of its financial year up to 30 April.
US
department stores have lost out as shoppers have spent on more
expensive items including electronics, household goods and cars.
'Darkening'
According
to Neil Saunders, chief executive of Conlumino retail growth is
slowing, amid a "darkening" economic outlook. However he says the
slowdown is not dramatic and it does not affect all sectors equally.
"Consumers
are now more cautious about spending than they were at the start of the
year. This is something not helped by the increase in the cost of gas
which, although still lower than last year, has risen consistently for
the past few months. Gas now takes a larger share of retail spend than
at any time in the past 6 months," he said.
"Ultimately, this
means that while Americans are still spending they are doing so more
selectively: choosing which products to buy and which retailers to visit
and paying much more attention to things like price and value for
money.
"This week we have heard from those retailers which have
lost out because their strategies, positioning, or appeal is wrong.
While their fortunes reflect a more negative mood, they are not
necessarily representative of retail as a whole."
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