The unchanged reading for retail sales in April is slightly stronger than it looks given that it follows an upwardly revised 10.7% m/m surge in March, and it suggests that the boost from the $1,400 stimulus cheques has only partly faded. Nevertheless, as goods spending inevitably drops back over the coming months, we were hoping for an offsetting rebound in services. But food services sales only increased by 3.0% last month, a marked slowdown on the March gain, which is a hint that labour shortages and the resulting surge in wages and prices may be acting as a constraint on the recovery in real activity.
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