Wednesday is off to a poor start as the key data release of the week posted sour results an hour before markets open. U.S. Retail Sales fell 0.4% in April, against expectations of a modest increase. In addition, the prior month’s 1.2% decrease was revised down to -1.3%.
Excluding auto sales, the results were slightly worse with a -0.5% reading in April.
“The crux of this report appears to be that the positive momentum seen in U.S. consumer spending in the first few months of this year has stalled,” said Millan Mulraine, economics strategist at TD Securities.
Compared to April 2008, the Census Bureau said the advance sales estimate has fallen 10.1%; excluding autos, the annual decline is 7.7%.
Analysts had been expecting sales to advance slightly in April as chain store sales posted their first gain in seven months, and gas prices rose 5%.
Instead, in the three months from February to April, retail sales have fallen 9.2% compared to last year, the report said.
Sales from gasoline stations were down a whopping 36.4% compared to one year ago, while sales from motor vehicle & parts dealers were down 20.7% from last year.
Looking forward, Mulraine said: “Nevertheless, we remain hopeful that the impact of rising equity markets plus the massive fiscal stimulus package, which is likely to start kicking in this quarter, will breathe new life into personal expenditures in the near term, thereby providing some much needed boost to U.S. economic activity.”
Also released at 8:30 am was the Import/Export Price Index for April.
Import Prices rose much more than expected with a +1.6% reading in the month, the Bureau of Labor Statistics said. Export prices rose 0.5%.
Analysts were expecting import prices to rise just 0.4%, but a 15.4% increase in petroleum prices came in higher than anticipated.