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Retail sales rose 1.3% in April according to the Commerce Department, trouncing forecasts.
Bespoke Investment noted that this was the biggest beat on sales relative to expectations in over three years.
The rise in sales was the biggest in a year. Retail sales fell 0.3% in March, and last month’s rebound reflected a jump in auto sales and slightly higher gas prices.
Consumers have not yet spent the totality of their savings from low gas prices. This “argues for a sustained pace of economic growth,” said Mark Heppenstall, chief investment officer of Penn Mutual Asset Management, which manages $20 billion in investments.
“The balance sheet of the consumer has been getting better … that augurs for more sustainable growth, which is a good thing,” he told Business Insider.
Excluding autos, sales rose 0.8%, and 0.6% excluding auto and gas sales. The retail sales control group, which feeds into gross-domestic-product calculations, rose 0.9%.
Economists had forecast that sales rose 0.8% month-on-month, according to Bloomberg.
Excluding auto sales, they forecast a 0.5% rise, and 0.3% excluding autos and gas. The retail sales control group was expected to gain 0.4%.
Sales at home improvement stores fell – the only major category that declined.
After a dismal week for retail-sector earnings, this report gained even more significance. Shares of Macy’s, Gap, Nordstrom, JC Penney and others tanked after their quarterly results showed they are still facing headwinds from online shopping to changing consumer tastes.
In April, sales at non-store retailers like Amazon jumped 2.1%. At department stores, they rose 0.3%.