Retail sales rebound modestly to start second quarter
Gas prices may be taking the bloom of the tax cut rose
WEEKLY MARKET COMMENTARY |
After a sluggish first quarter of outlays, consumers kicked off the second quarter of 2018 with a modest boost to the pace of retail sales in April. Top-line sales rebounded 0.3 percent for the month accompanied by a strong upward revision to 0.8 percent from 0.6 percent in March.
Much of the gain in the top line was driven by a 0.8 percent increase in sales at gas stations which, once the data is adjusted for inflation, implies a less than robust increase in spending during the current quarter. The control group that feeds into the estimate of household spending inside the gross domestic product increased 0.4 percent and is up a nonseasonally adjusted 2.4 percent year-over-year.
While the modest rebound in spending to kick off the second quarter is welcome, it’s far from impressive and becoming clear that increasing gas prices may be taking the bloom of the tax cut rose.