WORLD> America
US retail sales fall in April, dent recovery hope
(Agencies)
Updated: 2009-05-13 23:02

WASHINGTON -- Sales at US retailers fell for a second straight month in April as cash-strapped consumers held back on some purchases, according to a government report on Wednesday that dented hopes the economy was beginning to improve.

The Commerce Department said total retail sales slipped 0.4 percent after falling by 1.3 percent in March. Excluding motor vehicles and parts, sales dipped 0.5 percent in April, compared to a 1.2 percent decline the prior month.

US retail sales fall in April, dent recovery hope
In this May 11, 2009 photo, store closing signs are posted at a furniture store that will be closing due to the economy in San Jose, California. [Agencies]

Economists had expected retail sales to be flat in April.

While the pace of decline in retail sales slowed from the prior month, the report dampened expectations of a quick end to the nation's deep recession.

"I would say the likelihood is growing that second quarter consumption in the US is going to be negative," said Robert Blake, senior currency strategist at State Street Global Markets in Boston.

"This would deal a considerable blow to the green shoots talk and it's possible that would hit some of the recent optimism in the markets and hurt risk appetite."

US shares fell on the data, while government bond prices rose.

"These numbers are certainly discouraging, a bit disheartening," said David Resler, chief economist at Nomura Securities in New York.

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Vehicles and parts sales rose 0.2 percent after a 2.0 percent plunge in March, the Commerce Department said.

Gasoline sales dropped 2.3 percent in April after tumbling 3.2 percent the previous month. Sales of electronic goods fell 2.8 percent, versus a 7.8 percent plunge in March, while building materials rose 0.3 percent after slipping 0.8 percent.

In another report, the Commerce Department said business inventories fell 1.0 percent in March, after declining by 1.4 percent in February. This was as the stock of unsold motor vehicle and parts fell 2.0 percent.

In a separate report, the Labor Department said import prices rose 1.6 percent, a second straight monthly increase after a 0.2 percent gain in March.

Nonetheless, import prices on a year-over-year basis plunged a record 16.3 percent - a sign that inflation is unlikely to be a short-term problem in view of relatively weak global demand.

Imported petroleum prices were up 15.4 percent in April, the largest monthly rise since a 17 percent increase in March 2002, following revised rises of 7.9 percent in March and 5.3 percent in February.

But nonpetroleum import prices fell 0.4 percent in April, a ninth straight monthly decline, and were down a record 5.6 percent on a year-over-year basis.

Export prices rose 0.5 percent in April after a revised 0.7 percent decrease in March but were down 6.8 percent from April a year earlier.

Separately, mortgage applications slipped to the lowest level since mid-March, driven by a drop in requests to refinance loans even as borrowing costs dipped toward record lows last week, according to the Mortgage Bankers Association.