KEY DATA: Sales: +0.1%; Excluding Vehicles: 0.0%/Import Prices: -0.4%; Excluding Fuel: 0.0%; Export Prices: -1.0%; Farm: +1.4%

IN A NUTSHELL: "Consumers paused in April, but with the weather improving and prices under control, that could change very quickly."

WHAT IT MEANS: Households shopped 'till they dropped in March and it looks like they dropped shopping from their list of things to do in April. Retail sales edged up a touch, largely because the demand for vehicles remained brisk. That was surprising given the decline in unit sales. The sharp rise in gasoline sales was likely due to the sharp rise in gasoline prices. Purchases of sporting goods, health products, garden supplies and especially clothing were up solidly. On the other hand, demand for electronics and appliances tanked and Internet sales were off significantly. I guess people decided to go outside after having being cooped up all winter. And while families hit the department stores hard, they didn't go to restaurants. I have no idea why that happened.

As for inflation, at least those goods that we get from the rest of the world, there is little sign that foreigners are raising their prices for the goods they sell here. Yes, energy costs were off but if you scan the details, there were few areas where prices rose very much if at all. Whether it was consumer goods, vehicles or capital goods, the increases were pretty small. On the export side, the big price increases in farm products are back and that means U.S. agricultural income should be up pretty solidly.

MARKETS AND FED POLICY IMPLICATIONS: While consumers didn't buy nearly as much as we had hoped, we need to be a little cautious about the April retail report. Sales in March were up a massive 1.5% so any gain, no matter how small, should be taken as a positive. That said, the numbers were disappointing as there were hopes that the warmer weather would heat up consumer purchases. It didn't, at least not yet. With jobs and incomes growing, the unemployment rate coming down and confidence rising, it would be very surprising if we don't see a rebound in May. Gasoline prices look like they have peaked and inventories are high, so that could put a little money back into peoples' wallets as we go into the summer driving season. There is also little reason to worry that inflation will sap spending power. Thus, I remain optimistic that growth this quarter could exceed four percent and the momentum will be sustained for the remainder of the year. But we need to see that happen first and the Fed will watch and wait. The next FOMC meeting is June 16-17 and the May retail sales report will be out by then, so members will have a better reading of consumer behavior. As for the markets, if profits matter, the retail numbers should not make investors happy, especially given the focus on the days headline number, not the implications or the nuances. But I never try to guess the direction of the markets on any given day as they are efficient but not necessarily rational.

Joel L. Naroff is the co-author, with veteran journalist Ron Scherer, of the new book "Big Picture Economics: How to Navigate the New Global Economy".