(Reuters) – U.S. retail sales were flat in April as households cut back on purchases of automobiles and other big-ticket items, the latest sign the economy was struggling to rebound strongly after barely growing in the first quarter.
The weaker-than-expected retail sales report from the Commerce Department, and other data on Wednesday showing the 10th straight month of declining import prices in April, suggest little urgency for the Federal Reserve to start raising interest rates.
“Hopes for a strong rebound are now fading. The likelihood of a near-term Fed action is almost zero now,” said Thomas Costerg, an economist at Standard Chartered Bank in New York.
While March’s retail sales were revised higher to show a 1.1 percent increase instead of the previously reported 0.9 percent rise, that was not enough to offset the general weak tone of the report. Economists had forecast sales up 0.2 percent in April.