The good news is that retail sales were up slightly in April. The not so good news is that consumers have changed their minds about how they will spend their government rebates. Well, hey, at least there is some good news.
And we’ll look first at that little bright spot: Retail sales for April (not counting automobiles, gas stations and restaurants) climbed 2.3 percent. When non-general merchandise categories such as cars, gas stations and restaurants are included, figures from the U. S. Commerce Department show a dip of .2 percent.
Still, National Retail Federation (NRF) Chief Economist Rosalind Wells notes, “The month-to-month sales increase was the largest we’ve seen since last November, a much welcomed reprieve.”
Spring weather boosted sales at building material, garden equipment and supplies stores for the first time in months. The increase was small — only 1.9 percent — but it was nevertheless an increase. Healthier increases of 4.7 percent showed up at sporting goods, hobby, book and music stores.
Sales at electronics and appliance stores increased 5.1 percent, and sales at clothing and clothing accessories stores increased .7 percent. The NRF noted that sales at health and beauty stores – which went up 3.1 percent – reflected that consumers are sticking to purchases of necessities.
On a less happy note, the NRF reports that while consumers still are planning to spend about 40 percent of their tax rebate checks — sending $42 billion back into the economy — their spending plans have shifted slightly from what they were in February.
Now, consumers say they will spend more of their rebates on necessities such as food and gas rather than on discretionary items. The rising cost of fuel has resulted in 17.2 million consumers – up from 12.1 people in February – saying they will spend part of their rebates to pay for fuel.
Likewise, the most recent survey found 21.2 million people planning to spend some of their rebate on food, up from 20.4 million people planning to do that in February.
Fewer people than in February plan to use their rebates to buy furniture (2.7 million vs. 4 million); to purchase a vehicle (2.4 million vs. 3.2 million in February); or to go to a salon or spa (2.9 million vs. 3.5 million in February).
Young people between the ages of 18 and 24 will spend more of their checks than any other age group. Women are more likely to spend and/or save portions of their rebate; men are more likely to pay down debt.