Retail sales climb but keep an eye on gasoline

Gasoline prices have soared and the extra cash we are leaving at the pump may be starting to have a modest impact at the nation’s retailers, according to the latest data released today by the Commerce Department.

Advance retail sales increased a respectable 0.5% in April. Ex-autos, sales improved by 0.6%. But excluding autos and a 2.7% jump in receipts at gasoline stations, so-called core sales rose a more muted 0.2%.



Oil prices remain well below the 2008 peak, but gasoline prices have soared in recent months, pushing the price up over $1 per gallon from a year ago, as prices approach a record high (see Crude oil inventories approach near-term record).

Job growth as helped to support personal income, which in turn, has lent some support to spending.

But as the chart above reflects, the rate of growth in sales ex-autos, gasoline has gradually decelerated from November’s high of 5.9% y/y to 4.7% last month.



That doesn’t mean consumers are returning to their recessionary ways, but the evidence suggests that higher gasoline prices do appear to be modestly impacting the nation’s retailers.

Oil and wholesale gasoline prices have tumbled over the past couple of weeks in volatile trading. A meaningful drop at the pump would be welcome news.