Retail sales climbed 0.9% in April even as inflation remained at about a forty-year high, reported the U.S. Commerce Department on Tuesday.
Notable figures in the retail sales report
In comparison, the Dow Jones estimate was for a marginally higher 1.0% increase. Core retail sales (excluding autos) were up 0.6% last month versus a 0.4% increase expected. These figures are not adjusted for inflation.
Interestingly, energy prices were down 2.7% in April. But a 2.1% increase in online sales, a 2.0% increase in bars and restaurants, and a 4.0% increase in miscellaneous retail helped sales grow for the fourth consecutive month.
Also on Monday, Home Depot reported strong results for its fiscal Q1 and raised its guidance for the full year, citing the consumer remains strong in the face of record inflation.
Economist reacts to the retail sales report
On a year-over-year basis, retail sales were up 8.2% in April. Discussing the report on CNBC’s “Squawk Box”, famed economist Mohamed El-Erian said:
The retail sales number tells us that the economy remains relatively strong. The risk of recession is there, but low. The growth is coming down but this is an economy that’s unlikely to go into recession unless we get another policy mistake.
El-Erian also reiterated that the economy is headed for stagflation. The U.S. GDP unexpectedly fell at an annualised pace of 1.40% in the first quarter of 2022. U.S. equities are up more than 1.0% on Tuesday.
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Source: https://invezz.com/news/2022/05/17/retail-sales-climbed-0-9-in-april-is-a-recession-still-on-the-table/