U.S. retail sales saw no growth in April, missing Wall Street forecasts and sparking concerns over consumer spending amid persistent inflation and high interest rates, according to the Commerce Department. This stagnation marks a significant slowdown from the 0.6% increase in March, with economists previously anticipating a 0.4% rise based on Bloomberg data.
Excluding autos and gas, retail sales actually dipped by 0.1%, contrary to the expected slight increase. The decline was led by nonstore retailers, including online sales which dropped by 1.2%, and sporting goods and hobby stores, which decreased by 0.9%. However, there were gains in other sectors; clothing and accessories stores saw a rise of 1.6%, and gasoline sales increased by 3.1%.
Tim Quinlan, a senior economist at Wells Fargo, noted that the timing of Easter and an Amazon (NASDAQ:AMZN) sales event likely inflated March’s figures, making the April decline appear more pronounced.
The broader economic data released on Wednesday also painted a mixed picture. The Consumer Price Index for April indicated a cooling in inflation, which might influence the Federal Reserve’s interest rate policies, suggesting a potential for rate cuts as early as September, according to Kathy Bostjancic, chief economist at Nationwide.
This latest retail data comes amid other indicators of a slowing economy, including weaker than expected job growth, a slight increase in unemployment, declining wage growth, and shrinking manufacturing activity. Michael Pearce, deputy chief U.S. economist at Oxford Economics, commented that while the economy shows resilience, the slowing consumer spending and cooling labor market allow the Federal Reserve to remain focused on inflation trends for future rate decisions.
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