Consumers Continue Thrifty Spending Habits
Consumer confidence continued to improve as spring eased into summer, but April retail sales showed that people were still pinching pennies.
Retail industry sales for April, excluding vehicles, gas stations and restaurants, decreased a seasonally adjusted 0.4 percent from March and dropped an unadjusted 1.7 percent year-to-year, according to the National Retail Federation (Washington).
“A depressed labor market and lack of consumer confidence continues to play a role in what people buy and how much they spend,” said Rosalind Wells, chief economist for the NRF. “Noticeable changes in consumer spending will take some time as the economy continues to rebuild itself through the rest of the year.”
U.S. Commerce Department figures show that total retail sales decreased a seasonally adjusted 0.4 percent from March and an unadjusted 9.4 percent year-over-year.
The disappointing news followed several months of stronger-than-expected retail sales.
Consumer confidence continued to gain strength, however, making its first three-month rally since the last quarter of 2005, according to results from the RBC CASH Index.
“Better-than-expected news about the economy and corporate earnings is helping consumers to recognize that the worst is behind us,” said Larry Miller, managing director of RBC Capital Markets (New York). “Their growing confidence is seen in the continued improvement of the RBC Jobs Index, which suggests that consumers have less fear of losing their jobs. That may lead to a revival in spending, further driving economic recovery.”
Consumers continued to focus on necessity items, boding well for health and personal care stores, which increased a seasonally adjusted 0.4 percent month-to-month and an unadjusted 5.4 percent year-over-year, according to NRF. Spring weather also helped get many people out of their home and into stores to buy garden supplies and sporting goods. [July 2009 PET AGE]
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