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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.


April Retail Sales Show Good Gains, but No Acceleration

Headline retail sales showed a 0.3% gain in April, on top of a 0.3% upward revision to the March estimate. For the "control" sales measure we track, sales were also up 0.3%, with a 0.4% upward revision to March.

The last two months now show better sales growth than what we saw over December through February. However, as you can see in the chart, the recent gains are not a significant departure from the trends of the last few years. 4% annual sales growth indicates a good growth pace in consumer spending on goods.

Services consumption is growing much more slowly, though, so that overall consumer spending growth is just decent. The consumer has not as yet contributed any to the faster economic growth that the Federal Reserve and various pundits expect.

Unlike the control sales measure that others track, our measure includes restaurant sales. Like the others, we exclude sales at car dealers, building materials stores and gas stations since retail sales there cover business purchases as well as consumer purchases. However, we see no reason to exclude restaurant sales on that score. For the record, restaurant sales declined slightly in April, after decent gains in February and March.

In general, again, the April sales news continues the trends of recent years. It is the big gains we saw in November that are the outlier. A couple months ago, many analysts thought those November gains signaled the start of a burst of rapid growth in consumer spending. Our take all along has been that those gains reflected some early Christmas shopping that would fade with the holiday season.

The last five months' data have been in line with our take. Consumption is holding up, but it is not contributing to any acceleration in overall economic growth.

Retail Sales Trends
Retail Sales Trends
Source: Census Bureau, as of 30 Apr 18. "Control" retail sales is total sales less vehicle dealers, service stations and building materials stores.

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 45 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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