Retail sales actually beat estimates mostly via upward revisions in both February and March that extended across most of the major components, though the April changes under-performed, with a flat headline reading and a -0.8% drop ex-autos.
We now have extra big respective March gains of 10.7% (was 9.8%) and 9.0% (was 8.4%), after February boosts as well. March gains were the largest since the record increases last May.
Retail sales ex-autos, gasoline, and building materials fell -0.8%, after an 8.5% (was 7.8%) March surge.
The components revealed divergent April swings that were mostly downward, after huge March rebounds in almost every category that have been revised even higher.
We saw a 2.9% April motor vehicle and parts sales rise after a 17.1% (was 15.1%) March surge, alongside a 3.1% April unit vehicle sales rise after a 12.9% March surge.
Building material sales fell -0.4% in April after an outsized 13.9% (was 12.1%) March surge that reversed a February weather hit. The April pull-back accompanied a -0.8% construction hours-worked drop and a flat construction payroll figure, after respective March gains of 4.4% and 97k.
Gasoline station sales fell -1.1% in April alongside a -1.4% drop CPI gasoline price rise, following respective March gains of 10.2% (was 10.8%) and 9.1%.
Beyond these major headline swings, clothing sales were down -5.1%, after March’s 22.7% (was 18.3%) climb. Sporting goods sale declined -3.6, after a 24.2% (23.5%) surge. Food and beverages were up 0.4%, following a 0.7% gain. Electronics sales rose 1.2%, following a prior 17.5% (was 10.5%) increase. Eating/drinking establishment sales increased 3.0%, after a 13.5% (was 13.4%) gain.
The last four monthly levels for sales are the highest in history. Sales in 2021 were lifted by two rounds of stimulus distributions, vaccines, and seasonal adjustment factors that likely pushed back SA sales from Q4 into 2021 due to COVID. We saw an interim hit to February sales from bad weather and the Texas freeze.
We will likely now expect a boost in Q1 GDP growth beyond our current 6.5X% assumption from the 6.4% advance figure. We may also raise our 8.5% GDP growth estimate for Q2.
Trade Prices
The trade price indexes slightly beat estimates with solid April gains of 0.7% for imports and 0.6% for exports, following outsized commodity-led gains through the four months ending in March that were revised higher, and that were skewed toward export price gains.
We saw April component gains of 1.2% for oil imports and 0.6% for food exports. Import prices ex-petroleum rose 0.7%, while export prices ex-agriculture rose by a sturdy 0.9%.
Core prices posted increases of a solid 0.6% for imports and a surprisingly strong 1.2% for exports. The March export core price gain faced an oddly-large boost to 1.5% from 1.0%.
On a 12-month basis, imports prices accelerated to a 10.6% y/y, from 7.0% y/y (was 6.9%) in March. Export prices climbed to a 14.4% y/y gain from 9.5% y/y (was 9.1%) in March.
The April moderation in price gains reflected a pause in the energy price uptrend, though we still have a sharp 2021 acceleration that is only partly due to y/y “base-effects.”
The trade price uptrend since April of 2020 reflects dollar declines and supply bottlenecks, with a particularly robust 2021 climb led by a commodity price surge, though outsized trade price gains in Q1 left room for more modest Q2 increases.
