US retail sales rise a scant 0.1 percent in April
AP and AFP Wednesday, May 14, 2014, 12:08 am TWN
WASHINGTON/PARIS -- U.S. retail sales growth slowed in April, with consumers shopping less online and cutting back on purchases of furniture and electronics.
The Commerce Department said Tuesday that retail sales rose just 0.1 percent last month, after surging 1.5 percent in March following a harsh winter that had curtailed shopping.
Auto sales increased 0.6 percent in April, and purchases at clothing stores were up 1.2 percent. But most of those gains were offset by declines in spending at restaurants, online retailers and furniture and electronics stores. Excluding autos and gasoline, retail sales fell 0.1 percent last month.
The modest sales suggest that consumers continue to be cautious during the still-slow, nearly five-year recovery. Higher sales would help drive faster overall economic growth because consumers account for about 70 percent of all economic activity.
But wages have not budged much during the recovery, and growth has struggled to eclipse 3 percent, the average annual gain after World War II.
The Commerce Department previously reported that the economy grew just 0.1 percent in the January-March quarter. That figure could slip into negative territory as the government revises it, according to several economists.
But the brutal winter depressed the economy during the first quarter, and economic indicators since then have pointed to stronger growth in the current April-June quarter. Many economists are looking for a rebound to growth of around 3 percent in the current quarter and similar solid readings for the rest of the year.
Hiring has been strong for the past three months. Employers added 288,000 jobs in April, after gains of more than 200,000 in the previous two months. But average wages were flat in April.
The slow but steady improvement expected for this year has led the Federal Reserve to trim its monthly bond purchases. The Fed is buying US$45 billion of bonds each month, down from US$85 billion. The purchases were intended to reduce long-term interest rates in order to stimulate borrowing, spending and growth. But with the economy gaining strength, Fed officials believe that type of support is no longer needed.
Growth Weakening in Major Emerging Economies: OECD
Growth is weakening in major emerging economies, the OECD said on Tuesday, while the recovery in the eurozone remains on track despite some signs of a slowdown in Germany.
The OECD index of composite leading indicators (CLI) showed that growth conditions were below trend in Brazil, China and India and even losing momentum in Russia, struck by the crisis in Ukraine.
Inside the eurozone, the CLIs show growth strengthening in Italy and the single currency bloc as a whole, with the two biggest economies France and Germany showing stable growth momentum.
But other data this week has suggested that the German economy, a longtime bright spot in the often troubled eurozone, may be stalling.
On Tuesday, a survey from the ZEW economic institute showed that investment sentiment in Germany fell to the lowest level for nearly 1.5 years. Analysts are however still expecting solid growth for this year.
The French central bank meanwhile forecast that France, while avoiding recession, will only see anemic growth of 0.2 percent in the second quarter this year.
The head of the French MEDEF employers' union Pierre Gattaz said his data showed no "reversal in the outlook" for France save perhaps "a halt in the decline of certain sectors."
For the OECD as a whole — and the United States, Canada and Japan in particular — growth remained at a stable momentum with Britain showing initial signs of acceleration.
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