Retail sales up for 10th straight month in April - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Retail sales up for 10th straight month in April

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FILE - In this May 5, 2011 file photo, contractor Mylan Johnson pumps gas into his truck at the Marathon Station in Moreland Hills, Ohio. FILE - In this May 5, 2011 file photo, contractor Mylan Johnson pumps gas into his truck at the Marathon Station in Moreland Hills, Ohio.

WASHINGTON (AP) — Consumers spent more on gasoline, clothing and autos in April, pushing retail sales up for a 10th straight month. But much of the gain came from a surge in gasoline and food prices.

Retail sales rose 0.5 percent in April after a 0.9 percent increase in March, the Commerce Department reported Thursday. Excluding a 2.7 percent jump in gasoline sales, the increase was a much smaller 0.2 percent.

Pump prices have been surging in recent months. The nationwide average has hovered slightly below $4 per gallon. Economists are worried that higher fuel costs will leave motorists with less money to spend on other discretionary goods and that will slow economic growth.

Grocery stores sales jumped 1.5 percent — triple the March increase. That partly reflected higher food prices.

The overall gain in sales in April was the smallest increase since July. However, the government did revise up the March increase from a previous estimate of 0.4 percent to a much stronger 0.9 percent gain. February sales were also revised up to show a stronger 1.3 percent increase rather than the previous 1.1 percent gain.

The government report was at odds with reports from 28 of the nation's biggest retail chains. According to a survey by the International Council of Shopping Centers, these retailers enjoyed strong sales last month and over the past two months saw sales rise 5.25 percent, compared to the same period a year ago. That was the strongest spring since 1999.

Retailers are benefiting from a Social Security tax cut, which is putting more money in people's pockets. But economists worry that consumers may be forced to spend much of their tax savings to fill their tanks.

Oil prices have eased in recent days. On Thursday, the dropped to near $96 a barrel on expectations that global oil demand growth will slow this year, particularly in the U.S. That could lead to lower gas prices this summer, as some economists have predicted.

In April, sales of autos posted a modest 0.2 percent increase following a sharp 0.7 percent drop in March. Automakers had reported that sales of smaller cars getting 35 mpg or better showed big gains last month.in April.

Sales at clothing stores posted a 0.3 percent rise. However, sales at general merchandise stores, a category that covers both department stores and big retailers such as Wal-Mart, edged up a modest 0.1 percent. And department store sales actually fell 0.2 percent.

Sales at furniture stores fell 1.1 percent in April, probably reflecting the continued weakness in home sales, while sales at electronics and appliance stores were down 2.2 percent. The retail sales figures are not adjusted for changes in prices.

Consumer spending is closely watched because it accounts for 70 percent of economic activity.

The overall economy grew at a 1.8 percent annual rate in the January-March quarter, weaker than the 3.1 percent growth in the previous quarter. The weaker growth reflected in large part a slowdown in consumer spending. However, economists believe spending will accelerated in coming months, reflecting stronger gains in employment.

Copyright 2011 The Associated Press.

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