Sales are rising at motor vehicle dealers as consumers shift spending away from home furnishings toward new automobiles. Justin Lahart reports in The Wall Street Journal:
What Americans are spending their money on is changing. But they keep spending more, nonetheless. And in one crucial category, there is reason to believe growth is just getting started.
The Commerce Department on Tuesday reported that retail sales rose a seasonally adjusted 0.4% in April from a month earlier after slipping 0.7% in March. That was less than the 0.8% economists polled by The Wall Street Journal had expected. But sales excluding gasoline stations, car dealers, building-materials stores and food services—the so-called control group that economists use to track the underlying pace of consumer spending— rose 0.7%. That put control spending above its first-quarter average, setting the stage for another quarter of spending gains.
The report also showed how the contours of consumer spending continue to shift. Sales at furniture and home furnishing stores, department stores and electronics and appliance stores, all of which were pandemic beneficiaries, fell. Sales at food services and drinking places rose.
Sales at motor vehicle dealers also rose a bit, increasing by 0.1% from a month earlier. Gains there seem likely to continue, and strengthen, in the months ahead, providing support for spending and the economy.
The word “recession” is on a lot of lips lately, what with the Federal Reserve’s sharp increases in interest rates over the past year and the travails of the banking sector, but in some respects the auto industry has only just begun to pull out of its pandemic-triggered downturn. Last year, there were 13.75 million cars, pickup trucks and other light vehicles sold in the U.S., the fewest since 2011, when auto sales were still pulling out of the financial crisis. Lately, with supply chains steadier and vital semiconductor chips more widely available, sales have been making a comeback. Through the first four months of the year, Commerce Department figures show that 15.41 million light vehicles have been sold at a seasonally adjusted, annual rate.
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