Consumer Spending Down, But Not Out

Andrew Wolf, retail and consumer sector analyst at BB&T Capital Markets, told CNBC’s “Squawk Box” that consumer spending is far from dead.

The Commerce Department said U.S. retail sales fell 0.2% in April. It was the largest decline in retail sales since last September. Excluding autos, retail sales were flat.

Retail Sales Reaction
Retail Sales Reaction   

“(April’s sales were) probably an outlier,” Wolf said. “It was a noisy past two months. If you recall, March came in well above expectations. April was worse. Easter played a role. Weather played a role. I stick to my underlying thesis that there’s a slowdown in consumer (spending), but it’s too soon to call the consumer toast.”

He said the core inflation number was good, but higher food and energy prices mean a further slowdown in consumer spending.

The Labor Department said wholesale prices rose 0.7% in April, down from a 1% increase in March. Gasoline prices jumped 8.2%, following increases of 8.7% and 5.3% in the previous two months.

Outside food and energy, prices were unchanged last month, the second straight month the core inflation index was flat.