Retail sales rose 0.5 percent last month, somewhat less than many economists expected, suggesting continued modest economic growth.
The Commerce Department reported that the value of sales at gasoline service stations, which fell because of the drop in gasoline prices, helped restrain retail sales in April. Without gasoline sales, retail sales would have risen 0.7 percent.
However, automobile sales, which declined in February and March, rose in April, boosting the retail sales figure. Auto sales were buoyed by another set of discount financing programs offered by major auto makers. Without the auto sector, retail sales would have declined 0.4 percent, Commerce said.
Retail sales have risen little since October, and the April figures were at virtually the level of last December. The increase in April followed a 0.9 percent decline in March.
"I would say it's fundamentally a continuation of the erratic up-and-down, but trendless, pattern from the last couple of months," Lawrence Chimerine, chief economist with Chase Econometrics, said of the retail sales report.
Commerce Secretary Malcolm Baldrige said that he expects to see "faster growth in the second half" and that weak prices in some areas mean that, after adjusting for small price increases or declines, consumer spending was actually higher than it appeared.
"Weak consumer prices suggest that even moderate gains in nominal household spending should correspond to solid growth in real spending," Baldrige said. "Strong demand by households for new homes and consumption goods will set the stage for faster growth in the second half."
Many economists had expected consumer sales to begin picking up by now because of the increased purchasing power from two consecutive monthly declines in prices for consumer goods. Also, the strong growth in new-home sales suggests that purchases of durable goods such as furniture and major appliances for new houses should rise. However, working against renewed spending are consumers' high debt levels and uncertainty about whether some interest payments will remain tax-deductible, discouraging purchases on credit, economists said.
Many economists said they now expect growth in gross national product -- the nation's output of goods and services -- to increase at about a 2 percent rate in the spring quarter, slower than the 3.2 percent pace in the first quarter. The April retail sales report confirms the slower growth, economists said.
Commerce said that sales in the three months that ended in April were about the same as they were in the previous three months.
Durable goods sales rose 3.2 percent in April, as automotive dealers' sales rose 4.1 percent, following a 4.6 percent decline in March. Building materials sales, reflecting the strong housing market, rose 5 percent in March, Commerce said.
Sales at general-merchandise stores rose 1.1 percent in April, following a 1.5 percent rise in March. Food-store sales declined 1.6 percent, following a 0.6 percent increase in March. Sales at gasoline stations fell 2.3 percent and were 13.5 percent below the level in April 1985. They had fallen 7.1 percent in March.