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Wallets clutched tightly in April

By Mark Hamrick · Bankrate.com
Tuesday, May 13, 2014
Posted: 2 pm ET

©auremar/Shutterstock.com The weather may have warmed up (finally!) in April, but U.S.retailers largely got a cold shoulder from consumers, who held on to their wallets tightly. New figures from the Commerce Department show retail sales were barely changed last month, rising just 0.1 percent.

Meanwhile, March's more robust initial reading was revised upward, from 1.1 percent to 1.5 percent. But that was amid economic growth that likely contracted during the first quarter.

Winners and losers

The April figures appear to confirm the persistently uneven nature of the years-old economic recovery.

If you were adding to your spring fashion collection, it appears you had some company. Economist Ken Mayland with Clearview Economics notes that apparel sales were among the better-performing categories last month, increasing 1.2 percent. Other retailers enjoying sales increases were auto dealerships, building materials stores, and grocery, health and personal care chains, says Kristin Reynolds, U.S. economist with IHS Global Insight.

The faltering housing market appeared to take a toll on sales of furniture, electronics and appliances, which saw declines.

Cheaper stuff available

Following a winter pause for the economy, retailers have been working to move their merchandise -- and that means clearance sales.

Some of the April pick-up in clothing sales reflected "pent-up demand for spring clothing after the harsh winter, " says Mesirow Financial economist Diane Swonk. "Most retailers still have an overhang of inventories, however, and have already launched sales to clear their shelves for summer merchandise."

The case for optimism

Some economists are betting on the likelihood of a stronger economy going forward.

"Looking ahead, we expect that the improving employment picture, and consumer mood at elevated levels, will lead to a solid second quarter for retail sales," says Reynolds.

Adds Swonk: "We could get close to a tipping point if recent gains in employment can be sustained and become broader based, and if homeowners start tapping their home equity lines of credit to fund repairs and upgrades to their homes."

Follow me on Twitter: @Hamrickisms.

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