April retail sales rise 0.9% even as consumers face sky-high inflation


Americans increased their spending in retail stores in April, a sign that consumers are still weathering the inflationary storm, even as prices continue to hover near a 40-year high.

Retail sales, a measure of consumer spending on a number of daily consumer goods including cars, food and gasoline, rose 0.9% in April from the previous month, it was reported on Tuesday. the Department of Commerce. That was in line with economists at Refinitiv’s expectations, but it marked a noticeable slowdown from March’s upward-revised gain of 1.4%.

INFLATION RISE 8.3% IN APRIL, DIP NEARLY 40 YEARS

So-called core retail sales, which exclude automobiles, gasoline, building materials and food services and are most closely correlated with the consumer spending aspect of the nation’s gross domestic product, rose 1 .0% in April.

People walk through a shopping area in Manhattan on June 7, 2021 in New York City. ( (Photo by ANGELA WEISS/AFP via Getty Images/Getty Images)

April’s advance – which is not adjusted for inflation, meaning consumers may be spending the same but getting less for their money – was driven by an explosion in spending on bars and restaurants as well as on vehicles, clothing, furniture and electronics.

Receipts at gas stations actually fell last month, as prices at the pump briefly fell from highs recorded in March. However, gasoline prices have since broken a new record, climbing to a national average of $4.52 a gallon from $3.04 a year ago.

“U.S. consumers continued to spend more at retail stores in April, despite inflation, as lower gasoline prices helped boost spending on discretionary items,” said Tuan Nguyen, U.S. economist at RSM. “But that won’t last long as gasoline prices hit a record high in May.”

Gasoline prices

A sign showing fuel prices at a Shell gas station in San Francisco, California, U.S., Monday, March 7, 2022. (David Paul Morris/Bloomberg via Getty Images/Getty Images)

There are other signs that inflation is starting to weigh on consumers: Walmart reported earlier on Tuesday that its profits were beaten in the first quarter of the year as the company grappled with soaring prices everyday consumer goods like food and fuel and the higher costs of grumpy procurement. Chains.

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The data comes as consumers face the worst spike in inflation in decades. The government announced last week that the consumer price index rose 8.3% in April from a year earlier, nearly a four-decade high. The reading was much higher than expected by economists and underscores that inflationary pressures in the economy remain strong.

Rising inflation is eating away at the strong wage increases American workers have seen in recent months: Real average hourly wages fell 0.1% in April from the previous month as higher inflation eroded the total wage increase of 0.3%, according to the Labor Department. On an annual basis, real incomes even fell by 2.6% in April.


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