U.S. retail sales take breather, record savings seen underpinning spending

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U.S. retail sales unexpectedly stalled in April as the boost from stimulus checks faded, but an acceleration is likely in the coming months amid record savings and a reopening economy.

The report from the Commerce Department on Friday also showed retail sales in March were much stronger than previously estimated, setting consumer spending on a higher growth path heading into the second quarter. There were also signs that Americans were starting to shift their spending from goods to services like restaurants and bars, with more than a third of the population vaccinated against COVID-19.

“There will be momentum going into the second quarter for economic growth because sales were off the charts in March,” said Chris Rupkey, chief economist at FWDBONDS in New York.

The unchanged reading in retail sales last month followed a 10.7% surge in March, the second-largest increase on record and an upward revision from the previously reported 9.7% increase. …

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