– Gasoline station sales declined by 4.7 percent
– Building materials up 1.5 percent
– Motor vehicles and parts up 1.0 percent
Retail sales up 0.1 percent in April, revised down in March
Retail sales in nominal prices rose 0.1 percent m-o-m in April, versus a decline of 0.5 percent (revised from -0.4 percent) in March. The April reading was stronger than expectations of a decline of 0.3 percent. Building materials increased by 1.5 percent, clothing by 1.2 percent, motor vehicles and parts by 1.0 percent and electronics by 0.8 percent, while gasoline station sales declined by 4.7 percent and food and beverages by 0.8 percent.
Expect retail sales to decline in the future – an adjustment to disposable income
Fiscal tightening in the form of higher payroll taxes and automatic spending cuts has lowered the disposable income permanently, which is weighing on private spending. However, the decline in retail sales is temporarily mitigated by a cut in savings in order to smooth consumption. Moreover, falling gasoline prices in April were freeing up money for consumers to spend outside the gas pump, boosting retail sales.
Retail sales projection
The graph below shows our projection of how retail sales will change, assuming changes take place at the same pace as the average for the past six months.
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