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By Bob Willis
May 13 (Bloomberg) -- Sales at U.S. retailers probably fell in April as the biggest housing recession in a quarter century and record gasoline prices prompted consumers to put off buying autos and appliances, economists said before a report today.
Purchases dropped 0.2 percent following a 0.2 percent gain the prior month, according to the median forecast of 76 economists in a Bloomberg News survey. A separate report may show import prices surged for a second month in April.
Americans are contending with a slump in property values just as food and fuel prices soar, unemployment climbs and banks restrict access to credit. The risk of accelerating inflation may keep Federal Reserve policy makers from lowering interest rates further this year, even as the threat of recession looms.
``Consumers are bruised,'' said Oscar Gonzalez, an economist at John Hancock Financial Services in Boston. ``Credit is a problem and their housing wealth is declining. There are a lot of elements against the consumer.''
The Commerce Department's report is scheduled for 8:30 a.m. in Washington. Forecasts for retail sales ranged from a decline of 0.9 percent to a gain of 0.6 percent.
Fed policy makers indicated they were ready to hold off on further rate cuts after a quarter-point move on April 30. In addition to seven reductions since September, the Fed has introduced new lending tools to investment banks and helped JPMorgan Chase & Co. take over Bear Stearns Cos. in March by extending $29 billion of financing.
Fed Chairman Ben S. Bernanke will comment on liquidity measures via satellite today at 8:20 a.m. to an Atlanta Fed conference.
Auto Slump
Expensive items like automobiles saw the biggest drop in demand last month. Cars and light trucks sold at a 14.4 million annual pace in April, the fewest in almost a decade, according to industry figures.
Retail sales excluding automobiles increased 0.2 percent after a 0.1 percent rise in March, according to the Bloomberg survey median. A jump in spending at service stations, reflecting rising gasoline prices, probably inflated the figure, economists said.
Consumer spending is forecast to grow at an annual rate of 0.5 percent this quarter, down from a 1 percent pace in the first three months of 2008 and the smallest gain in almost 17 years, according to the median estimate of economists surveyed by Bloomberg News from May 2 to May 8.
Rebate Checks
Spending will rebound to a 2.3 percent growth rate in the third quarter as the bulk of the $117 billion in tax-rebate checks included in a government stimulus plan are spent, the survey showed. That will be followed by a deceleration to a 1.6 percent pace at the end the year.
``While the rebates will be helpful in the short run, they won't generate a sustained increase in spending,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. ``By the fourth quarter, growth will look disappointing to most people.''
In the two weeks since the payments started, the government sent out $27.2 billion in rebates, the Treasury Department said May 9.
The stimulus probably won't be enough to keep the economy from stagnating in the second quarter. The economists surveyed by Bloomberg forecast overall growth this quarter at a 0.1 percent pace, the weakest since 2001.
Shoppers have been flocking to discount stores to stretch their paychecks and stock up on staples and gasoline. Costco Wholesale Corp., the largest U.S. warehouse-club chain, last week said April sales at stores open at least a year rose 8 percent as customers sought less-expensive clothing and discounted fuel.
Commodity Prices
Boosted by rising energy and food costs, import prices increased 1.6 percent in April after jumping 2.8 percent the previous month, according to the median forecast ahead of the Labor Department's 8:30 a.m. release.
Continuing price gains as oil, corn and other commodity prices soar, may prompt the Fed to keep its benchmark rate at 2 percent at its June 25 meeting, according to trading in the futures market.
Housing is likely to continue to be the economy's weakest component for the rest of the year as falling construction and declining home prices undermine demand for renovations and appliances.
A Commerce Department report at 10 a.m. may show that business inventories rose 0.4 percent in March, according to a Bloomberg survey. The slowdown from a 0.6 percent gain the prior month indicates businesses are trying to trim stockpiles in the face of slowing sales.
Bloomberg Survey
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Import Retail Retail Business
Prices Sales ex-autos Inv.
MOM% MOM% MOM% MOM%
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Date of Release 05/13 05/13 05/13 05/13
Observation Period April April April March
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Median 1.6% -0.2% 0.2% 0.4%
Average 1.6% -0.2% 0.2% 0.4%
High Forecast 2.4% 0.6% 0.7% 1.0%
Low Forecast 0.0% -0.9% -0.5% 0.0%
Number of Participants 51 76 74 55
Previous 2.8% 0.2% 0.1% 0.6%
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4CAST Ltd. 1.6% -0.1% 0.4% 0.2%
Action Economics 2.1% -0.2% 0.2% 0.2%
AIG Investments 1.5% 0.2% 0.7% 0.2%
Aletti Gestielle SGR --- -0.2% 0.2% 0.5%
Argus Research Corp. 0.5% 0.4% 0.6% 0.1%
Banc of America Securitie --- 0.0% 0.3% 0.4%
Bank of Tokyo- Mitsubishi 1.1% -0.2% 0.0% 0.4%
Bantleon Bank AG 1.6% 0.1% 0.3% ---
Barclays Capital 1.7% -0.2% 0.2% ---
BBVA 1.5% 0.0% 0.1% 0.4%
BMO Capital Markets 1.4% 0.0% 0.4% 0.4%
BNP Paribas 1.5% -0.1% 0.5% 0.5%
Briefing.com --- 0.2% 0.4% 0.4%
Calyon --- -0.1% 0.1% 0.3%
CEMEX --- 0.6% 0.6% 0.6%
CFC Group 1.5% -0.2% 0.2% 0.4%
CIBC World Markets 2.0% -0.5% 0.0% 0.5%
Citi 2.0% -0.3% 0.2% 0.2%
ClearView Economics --- -0.2% 0.3% 0.5%
Commerzbank AG --- -0.1% 0.2% 0.5%
Credit Suisse 2.0% -0.1% 0.3% 0.5%
Daiwa Securities America --- -0.3% 0.1% 0.4%
Danske Bank --- -0.3% 0.1% ---
DekaBank 1.4% -0.4% -0.2% 0.4%
Desjardins Group 1.3% -0.2% 0.1% 0.3%
Deutsche Bank Securities 1.5% 0.0% 0.4% 0.5%
Deutsche Postbank AG 2.0% -0.2% 0.2% ---
Dresdner Kleinwort 1.4% -0.2% 0.0% 0.4%
DZ Bank 1.8% -0.4% 0.0% ---
First Trust Advisors 1.5% 0.2% 0.4% 0.8%
Fortis 2.0% 0.0% 0.4% 0.5%
FTN Financial --- -0.3% 0.6% ---
Global Insight Inc. --- -0.3% 0.0% ---
Goldman, Sachs & Co. --- -0.2% 0.3% ---
H&R Block Financial Advis 0.8% -0.2% 0.2% 0.4%
Helaba 1.5% -0.5% -0.2% 0.4%
High Frequency Economics 1.5% -0.2% 0.2% 0.4%
HSBC Markets 1.6% -0.1% 0.5% 0.5%
IDEAglobal 1.8% 0.3% 0.2% 0.7%
Informa Global Markets 2.0% -0.1% 0.1% 0.5%
ING Financial Markets --- -0.5% -0.1% 0.5%
Insight Economics 1.8% -0.5% -0.1% 0.4%
Intesa-SanPaulo 1.5% -0.1% 0.2% ---
J.P. Morgan Chase 1.6% -0.7% -0.1% 0.1%
Janney Montgomery Scott L 2.1% -0.1% 0.3% 0.3%
JPMorgan Private Client --- -0.4% -0.4% 0.2%
Landesbank Berlin 1.2% -0.9% -0.5% 0.1%
Landesbank BW --- -0.5% --- ---
Lehman Brothers 2.2% -0.2% 0.0% 0.4%
Lloyds TSB 2.0% 0.2% 0.2% 0.5%
Maria Fiorini Ramirez Inc 2.0% -0.2% 0.3% 0.3%
Merrill Lynch 0.0% -0.6% -0.2% 0.1%
MFC Global Investment Man 2.0% 0.0% 0.3% 0.2%
Moody's Economy.com 1.7% 0.0% 0.4% 0.5%
Morgan Stanley & Co. --- -0.4% 0.2% 0.2%
National City Corporation 2.1% 0.0% 0.3% 0.6%
Newedge --- -0.2% 0.1% ---
Nomura Securities Intl. --- -0.1% -0.1% ---
Nord/LB --- -0.3% 0.2% ---
PNC Bank --- 0.1% 0.3% 0.4%
RBS Greenwich Capital --- -0.7% -0.2% ---
Ried, Thunberg & Co. 1.3% 0.1% 0.6% 0.3%
Scotia Capital 2.0% -0.4% 0.1% ---
Societe Generale --- -0.2% 0.2% 0.9%
Standard Chartered --- -0.1% 0.2% ---
Stone & McCarthy Research 1.8% 0.0% 0.4% 0.2%
TD Securities --- -0.4% 0.0% ---
Thomson Financial/IFR 1.8% 0.3% 0.4% 1.0%
UBS Securities LLC 1.0% -0.3% 0.2% 0.0%
Unicredit MIB 1.2% -0.2% --- ---
University of Maryland 2.4% -0.5% 0.3% 0.6%
Wachovia Corp. --- 0.1% 0.5% ---
Wells Fargo & Co. 2.1% -0.2% 0.2% ---
WestLB AG 2.0% 0.2% 0.1% ---
Westpac Banking Co. 1.8% -0.4% 0.1% 0.7%
Wrightson Associates 1.3% 0.1% 0.6% 0.4%
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To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
Last Updated: May 13, 2008 00:01 EDT
