Despite rising interest rates, high inflation and product shortages, retail sales rose above expectations in April and upward revisions to the prior month suggests a better first quarter for consumer spending than first reported, explained analysts at Wells Fargo.
Key Quotes:
“Retail sales climbed 0.9% in April after an upwardly revised gain of 1.4% in March.”
“The main takeaway is that despite all the obvious reasons to expect otherwise, retail spending has continued to grow.”
“Believe it or not, there was some indication of a slight reprieve in consumer goods inflation for April. Prices did something they have not done in seventeen months—they boosted real retail sales. Last week we learned consumer prices rose 0.3% in April, but goods prices slid 0.3%. With the retail sales report mostly covering goods spending, the decline in prices suggests real retail sales rose a stronger 1.2% during the month.”
“For now, the 1.2% gain in overall real sales bodes well for second quarter consumption and suggests consumers continue to spend in the face of higher inflation. We have emphasized for sometime that consumers could rely on their balance sheets in the near-term to meet spending. Whether they are relying on credit, drawing down excess savings or simply saving less of their monthly income to fund purchases, the April data show little signs of an impending slowdown.”
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