US Retail Sales Fall In April, Weighed Down by Autos

Source: Daily FX

US Advance Retail Sales, as measured by the Commerce Department, slipped in line with expectation by 0.2 percent during the month of April. A 2.8 percent drop in auto sales weighed the headline index down, and excluding this factor, retail sales actually rose 0.5 percent. A further look at a breakdown of the index shows that gasoline station sales actually slipped 0.4 percent, and with average gas prices rising steadily over the course of the month to over $3.50/gallon, the data suggests that Americans are actually cutting back on their energy consumption. Overall, the drop in spending is not surprising, as consumer confidence has tumbled signficantly in recent months amidst a collapse in the housing sector and deteriorating labor market conditions.

Nevertheless, given the jump in the ex-auto component and stronger-than-expected import prices, the US dollar has rallied on the news and is pushing EUR/USD down toward 1.5400.