Briefcase

U.S. retail sales up again in April

U.S. retail sales increased in April, suggesting consumer spending is holding up in the face of economic head winds including inflation and high borrowing costs.

The value of retail purchases increased 0.4% after an upwardly revised 0.7% decrease in March, Commerce Department data showed Tuesday. Excluding autos and gasoline, sales increased 0.6%. The figures aren’t adjusted for inflation.

While the overall figure came in below the median estimate in a Bloomberg survey of economists, the gain in sales excluding autos and gasoline topped expectations.

Seven out of 13 retail categories rose last month, including advances at auto dealers, general merchandise outlets and online merchants. The advance in April sales suggests low unemployment and steady wage growth are supporting demand for merchandise.

U.S. stock futures slipped, 10-year Treasury yields rose and the dollar was little changed as traders weighed the implications for Federal Reserve policy.

Still, Americans continue to shift more of their discretionary purchases to services and there are some signs consumers are overextending themselves. Sales fell at furniture retailers, sporting goods and other hobby stores, and at appliances and electronics outlets.

U.S. production rose 1% last month

Production at U.S. factories rebounded in April, led by a firm advance at automakers and suggesting some stabilization in goods demand.

Manufacturing output rose 1% last month after downward revisions to the prior two months, Federal Reserve data showed Tuesday. Including mining and utilities, total industrial production increased 0.5%.

The gain in factory output reflected a 9.3% jump in motor vehicle production as well as increases for primary metals, computers and electronic products, and chemicals.

The gain in auto production was the largest since October 2021. Vehicle assemblies totaled an annualized 11.4 million last month, the strongest since July 2020.

Confidence among homebuilders rising

U.S. homebuilder sentiment unexpectedly rose in May to the highest level in 10 months as limited supply continued to drive prospective buyers toward new construction.

The National Association of Home Builders/Wells Fargo gauge jumped five points to 50, extending a streak of increases to five months, figures showed Tuesday. Even with the recent improvement, the gauge is well below levels seen at the end of 2021, when mortgage rates were much lower.

“Lack of existing inventory continues to drive buyers to new construction,” Robert Dietz, NAHB chief economist, said in a statement. “With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.”

Measures of current sales and sales expectations rose to the highest level since the summer. A gauge of prospective buyer traffic also edged up to a 10-month high.

The share of builders reducing home prices declined, as did the percentage of firms using incentives to attract buyers, suggesting demand has recovered somewhat. That’s happening as easing mortgage rates increasingly allow prospective buyers to come back into the market after a tumultuous year for residential real estate.

From wire reports