While reported earlier this months that increased gas prices around the U.S. hadn’t yet begun to effect retail sales that early Spring optimism has given way to a slightly less rosy view of the situation.
From department stores to discounters, the nation’s retailers have collectively reported the worst monthly slump in sales in at least six years for figures reported for the month of April,. Listed among the culprits for slump were wet weather, and yes, higher gas prices.
The Commerce Department reported that Sales slid 1.8 percent during the month, well below earlier expectations, with companies like Wal-Mart Stores and Target being the hardest hit. According to retail research firm Retail Metrics, sales at stores open at least a year, a standard measure in retailing, fell 6.1 percent at Target and 3.5 percent at Wal-Mart.
The Conference Board Consumer Confidence Index has retreated a bit since that point and dipped again in April. The Index now stands at 104.0 (1985=100), down from 108.2 in March. The Present Situation Index decreased to 131.3 from 138.5 in March. The Expectations Index declined to 85.8 from 87.9.
According to Lynn Franco, Director of The Conference Board Consumer Research Center, “Unlike the decline in March, which was solely the result of apprehension about the short-term outlook, this month’s decline was a combination of weakening expectations and a less favorable assessment of present-day conditions. Rising prices at the gas pump continue to play a key role in dampening consumers’ short-term expectations. The decline in the Present Situation Index — the first decline in six months — warrants monitoring in the months ahead, as further declines would suggest a softening in growth.”
Consumers continue to view the short-term outlook with a degree of caution. Those anticipating business conditions to worsen in the next six months rose to 10.2 percent from 9.8 percent. Consumers expecting business conditions to improve decreased to 13.5 percent from 14.5 percent.
