• Prior was +0.5%

Details:

• Ex-autos +0.8% vs 0.5% expected
• Prior ex autos +0.7%
• Ex autos and gas +0.5 vs +0.5% prior
• Control group +0.7% vs +0.4% expected
• Prior control +0.5%
• Retail sales y/y +6.9% vs +4.87% prior

Bank of America forecast a beat on sales based on cardholder data and that’s exactly what happened. The big caveat is that gasoline station sales were up 26.5% y/y, which is a price effect from the Iran war.

The big drag remains housing-related spending, with furniture down 1.2% y/y. Restaurants are also struggling with food services and drinking places up just 2.7% y/y and down 0.1% m/m. Is that a canary in the coal mine or a secular trend away from restaurant eating and/or drinking in bars?

US retail sales measure the total dollar value of receipts at retail and food-services establishments, compiled by the Census Bureau’s Advance Monthly Retail Trade Survey. It’s the broadest read on goods consumption, capturing autos, gas, building materials, e-commerce, and the one service line in the report — bars and restaurants. The critical caveat: the headline is nominal, not adjusted for inflation, so price moves and volume moves are indistinguishable in the top-line number.

That distinction did the heavy lifting through April. Headline sales rose 0.5% on the month, in line with consensus, but decelerated from March’s 1.6% surge. Strip out the optics and the picture softens: gasoline prices jumped sharply as the Iran conflict kept crude elevated, meaning much of the gain was pump inflation rather than real demand. In real terms, retail sales actually fell 0.2% m/m.

The control group — which excludes gas, autos, and building materials, and feeds into GDP — is the cleanest signal in the report. It rose a healthy 0.7% pointing to steady underlying demand outside of energy. Never underestimate the US consumer.

This article was written by Adam Button at investinglive.com.