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Retail sales flat in April, falling short of Wall Street expectations
The US consumer showed signs of slowing in April.
Retail sales were flat for the month, according to data from the Department of Commerceincreasing concerns about the consumer situation in a context of rigid inflation and higher interest rates.
This marked a slowdown from the 0.6% monthly increase seen in March. Economists had expected a 0.4% increase in spending, according to Bloomberg data.
“The fact that retail sales stagnated in April is not necessarily a sign that the consumer is exhausted; but at least this time it doesn’t show continued evidence of an unstoppable consumer,” Wells Fargo senior economist Tim Quinlan wrote in a note to clients.
Excluding autos and gas, retail sales fell 0.1% last month; expectations were for an increase of 0.1%.
Non-store retailers, which include online sales, led the declines, dropping 1.2% from the previous month. Sporting goods and hobby stores also fell 0.9%. Meanwhile, sales at clothing and accessories stores grew 1.6% in the month, while gasoline sales grew 3.1%.
Wells Fargo’s Quinlan highlighted some one-off occurrences that were likely attributed to the declines. An early Easter holiday and an Amazon (AMZN) sales event likely boosted sales in March, while their absence in April caused outsized declines, according to Quinlan.
“The result is that many families increased their demand, buying a lot of things online in March, so it’s no surprise to see [nonstore retailers] down 1.2% in April”, Quinlan.
Elsewhere in Wednesday’s economic data, a new reading of the Consumer Price Index showed that consumer price increases in the US cooled during the month of Aprill, a welcome sign for investors as a series of hotter-than-expected inflation prints at the start of the year fueled a more aggressive stance from the Federal Reserve on interest rate cuts.
See more information: Inflation persists – this is where prices rise and fall
Given the The Fed pivot Due to interest rates likely remaining high for longer than initially expected, economists have been watching for any signs of weakness in the US economy.
“The CPI moderation in April is welcome after a string of elevated readings in the first quarter and keeps alive the prospect of the Fed beginning to cut rates in September,” Nationwide chief economist Kathy Bostjancic wrote in a note to customers this morning. retail sales in April provide additional support for the rate cut in September.”
Wednesday’s retail sales print is just the latest in a series of recent economic data that have shown signs of slowing economic growth.
In April, the US economy created fewer jobs than expected while unemployment rose unexpectedly and wage growth slowed. Other data also showed contraction of manufacturing activity in April and weekly unemployment claims reaching their highest level since August 2023.
The story continues
“Consumer spending is slowing as high interest rates weigh on rate-sensitive spending and as the labor market cools,” Oxford Economics deputy chief U.S. economist Michael Pearce wrote in a note to customers. “With aggregate balance sheets solid and the labor market cooling rather than collapsing, we expect the slowdown to remain gradual.
“The resilience of the economy frees the Fed to focus on incoming inflation data to guide its rate decisions.”
Shoppers gather at a Barnes & Noble store in the Americana at Brand mall the day after Christmas on December 26, 2023, in Glendale, California. (Photo by Mario Tama/Getty Images) (Mario Tama via Getty Images)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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