US Retail Sector Suffers Surprise April Slide

The US retail sector slumped unexpectedly in April as American consumers shied away from auto dealers and other retail outlets, government data showed on Wednesday.

The surprise dip at the start of the second quarter was led by a steep drop in sales of motor vehicles but other major retail segments also declined, including electronics outlets, building materials suppliers and online stores.

Weaker growth in retail spending could weigh on the economy in the second quarter.

Total sales of retail and food services fell 0.2 percent for the month to US$513.4 billion but the decline looked larger after an upward revision to March.

Economists had instead been expecting a 0.2 percent gain.

Compared to April of last year, sales were still up a solid 3.1 percent.

Sales of cars, light trucks and parts fell 1.1 percent, giving back some of March's gain.

Excluding the volatile auto sector, however, sales rose a token 0.1 percent, far smaller than the 0.7 percent gain that economists had been expecting.

Furniture sales were flat while electronics and appliances fell 1.3 percent while sales of building materials sank 1.9 percent.

Meanwhile department stores and internet retailers switched places in the recent trend, with online sales falling 0.2 percent while long-suffering department stores - hollowed out in many places due to the popularity of internet shopping - rose 0.7 percent for the month.

Ian Shepherdson of Pantheon Macroeconomics said the soft numbers again clashed with higher chain store sales data for reasons that remained unclear but suggested the data could be revised higher.

"For now, though, these data mean that the second quarter started poorly," he said. (AFP)