For the seventh straight month, retail sales in the U.S. have risen, according to the U.S. Department of Commerce. Sales grew 0.4% in April, better than the 0.1% gain projected by one survey of economists and much better than the projected decline of 0.2% in a different survey. The 0.4% overall gain was matched by a similar gain excluding auto sales.
Today’s report coincides with the release of quarterly earnings by J.C. Penney Co. Inc. (NYSE: JCP), Dillard Department Stores, Inc. (NYSE: DDS) and Nordstrom Inc. (NYSE: JWN), all of which reported solid earnings gains for the first quarter. The largest category gain, however, was posted in building material and garden supply sales, which rose 6.9% in April following a gain of 7.8% in March. That gain was likely a coat-tail effect from the rise in home sales, which were helped by the federal tax credit program. That program expired in April.
The overall rise in sales is believed to be a result of pent-up demand from consumers following the two-year recession. Auto sales were up 11.2% from April 2009, and gasoline station sales were up 28.5% from a year ago. The rise in gasoline sales is primarily due to this year’s higher prices, about $2.23 per gallon of reformulated gasoline compared with $1.39 a year ago.
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Manufacturing output also rose in April, by 1.0% according to the Federal Reserve, and industrial production grew by 0.8%. This is the second straight month that the figures have risen.
Automotive products and home electronics manufacturing declined, while appliances, furniture and other goods increased. Among the better bits of news, appliances and furniture production grew by 2.6%, machinery production grew by 2.6% and construction supplies grew by 2.8%.
The Commerce Department also reported today that business inventories grew by 0.4% in March, and total business sales rose 2.3%.
The U.S. economy is recovering, but jobs are still scarce and wages are still stagnant. The combination of rising inventories should help boost manufacturing and production, leading to lower unemployment. That is happening in fits and starts, as the April numbers showed with 290,000 new jobs added, some 44,000 of which were added in manufacturing for the first time in more than three years.
These tentative steps now need to pick up speed.
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