US retail sales unchanged in April on weak autos, furniture

Retail sales unchanged
Retail sales unchanged   

U.S. retail sales were unchanged in April as households cut back on purchases of automobiles and other big-ticket items, suggesting the economy was struggling to make a strong rebound after barely growing in the first quarter.

The Commerce Department said on Wednesday retail sales for March were revised up to show a 1.1 percent increase instead of the previously reported 0.9 percent rise.

Economists polled by Reuters had forecast retail sales rising 0.2 percent last month.

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Retail sales excluding automobiles, gasoline, building materials and food services were also unchanged after an upwardly revised 0.5 percent increase in March.

The so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists had forecast core retail sales rising 0.5 percent in April after a previously reported 0.4 percent increase in March.

Retail sales have trended weaker despite households getting a massive windfall from lower gasoline prices. Consumers appear to have saved much of the money from the cheaper gasoline.

The weak report was the latest sign that while the economy was finding its footing at the start of the second quarter, it was not doing so at a pace that would convince the Federal Reserve to tighten monetary policy before September. The economy was walloped by a mix of bad weather, disruptions at ports, a strong dollar and deep spending cuts by energy firms. The government reported last month that GDP expanded at a 0.2 percent annual pace in the first three months of the year.

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Trade and wholesale inventory data published last week, however, suggested the economy actually contracted. The government will release its GDP revision later this month.

Retail sales last month were curbed by a 0.4 percent drop in receipts at auto dealerships. Sales at service stations fell 0.7 percent. Sales at electronic and appliance stores slipped 0.4 percent, while receipts at furniture stores declined 0.9 percent.

There were some pockets of strength, with receipts at clothing stores up 0.2 percent, likely as consumers took advantage of Easter holiday discounts.

Receipts at online stores increased 0.8 percent, as did sales at sporting goods stores. Sales of building materials and garden equipment rose 0.3 percent. Sales at restaurants and bars increased 0.7 percent.