Retail sales in the U.S. remained unchanged in April, according to a report from the Commerce Department released on Wednesday. This flattening, driven by a decline in sales from motor vehicle and parts dealers, was counterbalanced by gains in other retail sectors.
The report highlighted that retail sales were virtually unchanged in April following a downwardly revised increase of 0.6 percent in March. Economists had projected a 0.4 percent rise for April, compared to the initially reported 0.7 percent growth for March.
Michael Pearce, Deputy Chief U.S. Economist at Oxford Economics, commented on the trends, noting, "Consumer spending is slowing as elevated interest rates weigh on rate-sensitive spending and as the labor market cools. With aggregate balance sheets solid and the labor market cooling rather than collapsing, we expect that slowdown will remain gradual."
Pearce further observed, "The resilience of the economy allows the Federal Reserve to focus on incoming inflation data to guide its rate decisions. We anticipate that improving inflation figures over the coming months will prompt the Fed to begin gradually easing rates starting in September."
Sales by motor vehicle and parts dealers declined by 0.8 percent in April following a 0.3 percent reduction in March. When excluding the drop in auto-related sales, retail sales edged up by 0.2 percent in April, aligning with economist expectations, after a 0.9 percent increase in March.
The slight rise in ex-auto sales was partly due to a significant 3.1 percent increase in sales by gas stations, driven by higher gasoline prices. Additionally, clothing and accessories stores and electronics and appliance stores experienced notable sales growth, while non-store retailers faced a sharp pullback after a surge in the prior month.
"The stalling of retail sales growth in May isn't a major concern since it largely reflects a drop in non-store sales following the conclusion of a one-off Amazon sales event that inflated April's figures," Pearce remarked.
The report also indicated that core retail sales—which exclude automobiles, gasoline, building materials, and food services—fell by 0.3 percent in April following a 1.0 percent jump in March.
