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U.S. ECONOMICS: April Retail Sales Preview - Big Gains Expected

U.S. retail sales are poised for a third month of big gains in April, following a winter sales hit in December and January that has only now been unwound. The release is due Tuesday at 8:30 a.m. ET.

Expectations are for increases of 0.5% for the headline and 0.7% ex-autos (witha consensus range of -.1% to 0.6% on the headline and 0.4% to 0.9% for ex-autos), with strength signalled by solid chain store sales that benefited from the late-Easter, a gasoline price bounce, and a construction hours-worked rise that signals a gain for building material sales. We face a modest April vehicle sales headwind.

Retail sales, consumer confidence and stock performance are all correlated. Confidence was mixed in April with Michigan Sentiment rising to 84.1 from 80.0, but with consumer confidence declining to 82.3 from 83.9. Stock prices rose over the course of the month, but year-over-year growth slowed to 18.7% from 20.1% in March.

After a shaky sales path through the winter months, retail sales are poised for solid growth in April, with a 0.7% ex-autos increase that matches the March rate, though a smaller 0.5% headline gain due to a drop-back in vehicle sales on the month. The late-Easter lifted most chain store sales measures, while a rise in gasoline prices and firm construction hours-worked and employment figures suggest upside risk for gasoline service station sales and expenditures on building materials and supplies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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