Archive for Wednesday, May 15, 2002

Consumer spending increases in April

May 15, 2002

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— Consumers the economy's lifeblood are keeping the recovery on track. They shopped with more gusto in April, pushing retail sales up by 1.2 percent, the best performance in six months.

The latest sales snapshot released by the Commerce Department Tuesday raised hopes among economists that shoppers will continue to keep their pocketbooks and wallets open to support the fledgling recovery in the months ahead.

"Consumers, for the most part, lack neither confidence nor money, and as long as they maintain even moderate growth in spending, the economy will keep chugging along," said Bill Cheney, chief economist at John Hancock.

The 1.2 percent advance was the biggest gain since a record 6.2 percent in October and was double what most economists were expecting. The stronger-than-expected performance came after a tightfisted March, when retail sales inched up by 0.1 percent.

Consumers, whose spending accounts for two-thirds of all economic activity in the United States, bought more cars, building materials, garden supplies and health care and beauty products last month. They ate out more, too.

Higher prices at the gasoline pump also contributed to the increase in overall retail sales in April. Even excluding sales at gasoline stations, though, retail sales were still solid.

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