Economy, April | featured news

U.S. retail sales declined in April and May, pulled down by a sharp drop in gas prices. But even after excluding volatile gas sales, consumers barely increased their spending... Americans did spend more in May on big purchases. Sales of cars, furniture and appliances all increased. That suggests consumers may be gaining more confidence in the economy.

American companies sold more computers, heavy machinery and telecommunications equipment in foreign markets in April, pushing exports to a record high. Imports declined, reflecting a big drop in auto imports from Japan caused by supply disruptions from the March earthquake and tsunami.

Consumer spending rose less than expected in April as high gasoline prices continued to squeeze household budgets, according to government data on Friday which also showed annual inflation accelerating at its fastest pace in a year.

The number of Americans applying for unemployment benefits surged last week to the highest level in eight months, a troubling sign a day ahead of the government's report on April employment.

The pace of expansion in U.S. manufacturing slowed in April for a second straight month but was brisker than expected, data showed on Monday, a sign the sector was holding up despite slower national growth.

Consumers felt better about the short-term outlook for the economy in April as expectations about the pace of inflation and concerns about the labor market eased.

Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers. The Labor Department said Thursday that new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.

In a sign that the state's struggling labor market may be strengthening, 14,200 positions were added by employers in April, the second straight month of expansion.

Retail sales and industrial production in April both enjoyed continued growth, reinforcing the sustainability of the economic recovery in the United States. On Friday the U.S. Commerce Department reported retail sales gained 0.4% in April, ahead of Wall Street’s expected 0.2% rise, but below the 2.1% jump in March. Peter Newland, economist at Barclays Capital, notes that the total was driven by a 0.5% increase in both autos and gasoline, and a 6.9% jump in building material sales. All of that is nice, but core sales, which exclude these elements, actually fell 0.2%, which is much weaker than excepted.

While improving, the job market still has a long way to go before it can be counted on to provide a base for a sustained economic recovery.