Retail Sales Off in April, Led by Home Furnishings

Washington, DC, May 14, 2009--Retail sales fell 0.4% in April from March, the Census Bureau said.

Sales at auto dealers edged up. Excluding automobiles, retail sales were down 0.5% in April. The steepest declines were among sellers of big-ticket items, such as home-furnishing stores and appliance dealers, as households remain wary about major purchases.

A recent spate of upbeat reports -- including a rise in consumer confidence and a drop in new weekly claims for unemployment benefits -- had raised hopes that the U.S. economy might begin growing in the current quarter.

Indeed, retail sales rose in January and February after sliding for six straight months. But those hopes were undermined by the 1.3% drop in retail sales in March as well as April's decline.

The steep downturn in the economy has prompted a new thrift among Americans, pushing the personal savings rate to 4.2% in March from 0.2% a year earlier.

In an April poll of 1,500 shoppers, retail research firm WSL Strategic Retail in New York found that 28% of respondents said they were putting more money into savings, up from 19% six months ago.

A long-lasting move toward thriftiness will be a challenge to a global economy that has become highly dependent on American consumers. Over the past three years, consumer spending has equaled 71% of U.S. gross domestic product, compared with 67% in the 1980s and '90s.