Stores make strong gains in April
Increase of 1.4 viewed as signal downturn at end
WASHINGTON -- Retail sales jumped 1.4 percent in April, the strongest showing in six months, as consumers streamed back into auto showrooms and shopping malls in what was viewed as a signal that this year's economic slowdown was short-lived.
The Commerce Department said yesterday that the April increase in sales showed widespread strength across a number of retail categories and followed a weak 0.4 percent advance in March.
The poor showing for retail sales in March along with a number of other indicators flashing weakness during that month had raised concerns that the economy, hit by a surge in energy prices, could be entering another period of weakness similar to what Federal Reserve Board chairman Alan Greenspan had called a ''soft patch" in 2004.
But the big jump in retail sales followed reports of a better-than-expected performance on trade and a big jump of 274,000 jobs in April.
''The soft patch isn't looking as soft as we thought it was," said David Wyss, chief economist at Standard & Poor's in New York.
He said the lower-than-expected trade deficit would likely boost overall economic growth to around 3.5 percent in the January-March quarter, up from the government's initial estimate that the economy was growing by just 3.1 percent during that period.
''We should be able to get 3.5 percent to 4 percent growth in the first half of this year, which would be a good solid performance," Wyss said.
Investors, however, were not as enthusiastic, choosing to focus instead on a profit warning from Wal-Mart Stores Inc. The Dow Jones industrial average fell 110.77 points to close at 10,189.48.
