Retail sales rose a modest 0.5 percent in April, the government reported yesterday, providing further evidence that consumers are beginning to cut back after a heavy spending spree in late 1978.
The increase, which followed a more robust 1 percent rise in March, constituted a falloff in actual sales volume, after adjustment to account for inflation. Much of the gain stemmed from higher food and fuel prices.
The figures came as something of a relief for the Carter administration, which has been looking for signs of some slowing from the more rapid pace of earlier this year and late 1978.Officials previously had feared over-heating.
Charles L. Schultze, chairman of the Council of Economic Advisers, said the administration now is less worried about the prospect of economic overheating, and as a result is more confident there will not be a recession.
Schultze told a breakfast meeting with reporters he thought that despite the recent price surge inflation "has not built itself into the economy yet" in the form of a speedup in wage increases. He described wage behavior as "moderate."
The April rise in retail sales brought overall sales to a seasonally adjusted $72.2 billion, up $345 million from March's levels. Sales levels in April were 10.8 percent above those of a year before.
Over the past three months, retail sales have grown at an annual rate 4.3 percent, far below the 13 percent annual rate at which prices have risen during the period. As a result, in "real" terms, consumer spending is falling off.
Yesterday's figures showed the bulk of the nominal rise in sales levels was concentrated in food and fuel-the result of higher prices rather than increased buying. Sales in food stores rose 1.4 percent. Gasoline sales jumped 1.7 percent.
Largely because of a dip in auto sales, purchases of durable goods declined 0.4 percent last month to a seasonally adjusted $25.25 billion. Auto sales declined 1.6 percent in April, following an 0.3 percent dip in March.
Sales of nondurable goods rose 1 percent in April to a seasonally adjusted $46.94 billion after growing by 0.9 percent in March.
The March increases were bloated in part by a rebound from February's depressed sales levels, which suffered because of the impact of adverse weather during that month.