Investing.com - Retail sales in the U.S. bounced back in April more than expected, raising hopes for a rebound in consumer spending in the second quarter, official data showed on Friday.
In a report, the U.S. Commerce Department said that retail sales increased by a seasonally adjusted 1.3% last month, surprising the forecast for a rise of 0.8%. Retail sales for March dropped 0.3%, whose figure was revised up from an initial 0.4% decline.
April's read was the biggest jump since March 2015.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude automobile sales, increased by a seasonally adjusted 0.8% in April, compared to forecasts for an advance of 0.5%. Core sales in March gained 0.4%, which was revised up from the initial estimate of a 0.2% increase.
Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.
The dollar extended gains after the report, which was released simultaneously with April producer prices. EUR/USD was trading at 1.1317 from around 1.1350 ahead of the release of the data, GBP/USD was at 1.4375 from 1.4410 earlier, while USD/JPY was at 109.18 from 108.87 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 94.59, compared to 94.33 ahead of the report.
Meanwhile, U.S. stock futures pared losses but still pointed to a lower open. The Dow futures pointed to a loss of 0.22%, the S&P 500 futures ticked down 0.125%, while the Nasdaq 100 futures fell 0.13%.
Elsewhere, in the commodities market, gold futures traded at $1,265.95 a troy ounce, compared to $1,271.15 ahead of the data, while crude oil traded at $45.97 a barrel from $46.12 earlier.