Data released on Friday showed retail sales were unchanged in April. The outturn was short of the consensus expectation, which was anticipating a modest gain; although the upward revision to the March figures softens the blow considerably, explained analysts at Wells Fargo. 

Key Quotes: 

“Retail sales were unchanged in April after upward revisions lifted March numbers to the 2nd highest monthly gain on record. Increased spending on autos and restaurants offset weakness in other areas.”

“The on-again, off-again dynamic with spending and big cash windfalls has injected new volatility into retail sales figures. Consider for example, in the 10-year period ending December 2019, the average monthly change in retail sales was just 0.3% with a high of +2.2% and a low of -2.0%. Between last year's lockdowns and a reopening surge in goods spending, this year's stimulus checks and late winter storms, it's no wonder why retailers are struggling to manage inventory and anticipate demand.”

“Unlike last summer when most people were stuck at home, just about everybody is ready to get out and go some place this summer. There are signs everywhere you look and getting your hands on a vehicle is proving to be a tall order.”

“Our consumer spending outlook is not influenced one way or another by today's report. In fact, a headline change in the other direction would not have rattled us either because nothing consumers might have done in April is all that material to the real driver of our forecast, which is the coming surge in consumer spending tied to the reopening of the service sector.”

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