US retail sales flat in April, economists surprised

US retail sales volumes were flat month-on-month in April at $436.8bn, according to the US Department of Commerce.

Economists had been expecting an increase of 0.2%.

Excluding sales of automobiles retail sales edged higher by a tenth of a percentage point versus March (consensus: 0.4%).

Sales at automobile dealers dipped 0.4% versus the prior month, while sales of furniture and at gasoline stations were off by 0.9% and 0.7%, respectively.

Core retail sales, those excluding automobiles and gasoline stations, were flat, a worse outcome than the 0.4% rise forecast by Barclays.

Personal consumption expenditures are now tracking at a gain of 2.9% instead of 3.5%, Barclays analyst Michael Gapen wrote.

As a result of the Gapen lowered his tracking estimate for second quarter GDP growth to 2.6% from 3% before today’s report.

“Alongside the surge in long-term interest rates over the past few weeks, the ongoing softness of retail sales is another reason to believe that the Fed will delay the first rate hike until September at least,” Paul Ashworth, chief US economist at Capital Economics said in a research note e-mailed to clients.

As of 14:52 the yield on the benchmark 10-yaer US Treasury note was softer by four basis points to 2.23%.