Weaker-than-expected April retail sales signaled slower US growth as petrol prices bit, bolstering views that the Federal Reserve will pause its interest-rate hike campaign next month.
US Commerce Department data showed sales at US retail stores rose by a smaller-than-expected 0.5% in April and were only spared an even weaker performance by strong petrol sales.
Petrol station sales jumped 4.6%, their largest increase since September 2005, as higher energy prices inflated the cost at the pump. But retail sales - excluding petrol - edged up just 0.1% after rising 0.7% in March.
Consumer spending accounts for two-thirds of US economic activity and analysts worry higher energy prices, which act like a tax on households, are hitting consumption.
The Fed last night lifted interest rates by a quarter percentage point to 5% but left the door open to a pause in its nearly two-year rate-hike campaign. Policy-makers expect growth to moderate after a very strong first quarter.
Retail sales, excluding cars and parts, increased 0.7% in April after a revised 0.5% rise in March. This was previously reported as a 0.4% gain.
Sales of new cars and parts fell 0.4% last month and March's increase was revised lower to show a 1% rise from 1.6% previously reported.
