Retail sales in the U.S. unexpectedly showed a modest increase in the month of April, according to a report released by the Commerce Department on Monday.
The Commerce Department said retail sales inched up by 0.1 percent in April following a revised 0.5 percent decrease in March.
The modest increase in sales surprised economists, who had expected sales to dip by 0.3 percent compared to the 0.4 percent drop originally reported for the previous month.
The unexpected sales growth in April was partly due to a 1.0 percent increase in sales by motor vehicle and parts dealers, which rebounded after falling by 0.6 percent in March.
Excluding the increase in sales by motor vehicle and parts dealers, retail sales edged down by 0.1 percent in April compared to a 0.4 percent drop in March.
The drop in ex-auto sales was partly due to a sharp decrease in sales by gas stations, which plunged by 4.7 percent in April amid lower gas prices.
When excluding both autos and gas sales, retail sales rose by 0.6 percent in April after coming in unchanged in the previous month.
Notable sales growth was seen at building materials and supplies stores, clothing and accessories stores, and non-store retailers.
Core retail sales, which exclude sales of autos, building materials, and gas, rose by 0.5 percent in April compared to a revised 0.1 percent increase in March.
Paul Dales, Senior U.S. Economist at Capital Economics, said, "Overall, it doesn't look as though January's payroll tax hike put much of a dent in consumption in either the first or second quarters."
"Most recently, the hit to after-tax incomes has been cushioned by the plunge in gasoline prices that has left households with more cash to spend on other items," he added.
The report said retail sales in April were up 3.7 percent compared to the same month a year ago, reflecting an acceleration from the 3.0 percent year-over-year growth reported for March.
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