US retail sales declined 0.2 percent in April, as consumers put a brake on purchases of fuel-guzzling sport utility vehicles, a government report showed Tuesday.
A steep drop in April vehicles sales, which dragged down overall retail sales, suggests Americans are feeling the pinch of tougher economic times and rocketing gasoline prices.
Stripping out auto sales, "core" retail sales rose a stronger-than-expected 0.5 percent, according to a monthly survey by the Commerce Department.
"Headline sales were down ... with weakness concentrated in auto sales. Weakness in this category is tied closely to soaring gasoline prices," said Aneta Markowska, an economist at Societe Generale.
Most economists had predicted that overall sales would drop 0.2 percent, while anticipating that "core" sales would rise 0.2 percent. The jump in "core" sales was the strongest since January.
The latest retail sales snapshot revealed a more subdued picture than March and suggests surging gasoline prices, and housing and credit woes are continuing to squeeze Americans' finances.
Many economists say the United States will likely endure a recession this year due to such economic headwinds, but economic growth remained positive during the first quarter.
Analysts sift through retail sales reports for clues on consumer spending which accounts for around two-thirds of US economic growth.
Sales of new vehicles in the United States plummeted to their lowest depths since 1992 last month, according to sales reports from the big auto manufacturers.
Americans shunned buying gasoline-hungry SUVs last month, and opted to buy smaller cars with better fuel efficiency.
The Commerce Department report showed that auto sales slumped 2.8 percent in April, marking the largest decline in sales since June of last year. Auto sales had fallen 0.5 percent in March.
Gasoline station sales fell 0.4 percent last month as gasoline and oil prices spiked. Oil prices have rocketed to record highs in recent days of over 126 dollars a barrel.
"Even gasoline stations rang up lower sales in a month that saw gasoline prices spike. Did everyone start taking the bus?" asked Jennifer Lee, an analyst at BMO Capital Markets.
The report showed that some life might be creeping back into home-related purchases despite the lingering housing market downturn.
Sales of building materials and garden equipment rose 1.9 percent following a 1.5 percent drop in March, while sales of electronics and appliances accelerated to show a gain of 1.4 percent.
Purchases of furniture and home furnishings remained subdued, however, while sales of clothing and fashion accessories held firm with a gain of 0.7 percent.
"This is as good as we can hope for given the backdrop of weakening labor markets, less favorable wealth effects, food and energy inflation and tighter credit markets," Markowska said.
Retail sales had rebounded 0.2 percent in March, but the government revised core March sales higher to 0.4 percent compared with an initial estimate showing a gain of just 0.1 percent.
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