U.S. retail sales drop 0.2 percent in April

U.S. retail sales dropped by 0.2 percent in April, the biggest decline since September last year, the Commerce Department reported Friday.

The drop defied analysts who were forecasting a 0.4 percent rise in April retail sales.

Data showed that auto sales, which account for 20 percent of total retail business, were down 1 percent in April after having gained 0.4 percent in the previous month.

While excluding auto sales, retail sales would have been unchanged, also weaker than the 0.5 percent rise expected by analysts. That followed a 1.1 percent increase in March.

Sales of electronics and electronic appliances rose by 0.7 percent in April, rebounding from a drop of 0.8 percent in March. Restaurant sales nudged up 0.1 percent, sharply down from a 1.4 percent spurt in the previous month.

March's retail sales, however, turned out to be better than previously estimated. The reading for that month had been revised to an increase of 1.0 percent.

Over the past 12 months, overall retail sales increased by 3.2 percent or 3.7 percent excluding the auto sector.

The weak performance in April retail sales might unsettle economists because consumer spending accounts for two thirds of overall economic activity. A sharp drop in consumer spending could drag the economy to slow further.

In the first three months of this year, the U.S. economy grew at an annual rate of only 1.3 percent. That was down from the 2.5 percent pace in the final quarter of last year and marked the slowest quarterly rate in four years.

Source: Xinhua