US consumers showed signs of slowing down in April.
Retail sales were flat in the month, according to Data from the Ministry of CommerceThis raises concerns about the consumer situation amid steady inflation and rising interest rates.
This represents a slowdown from the 0.6% monthly increase seen in March. Economists had expected a 0.4% increase in spending, according to Bloomberg data.
Excluding automobiles and gas, retail sales fell 0.1% last month. Expectations were for an increase of 0.1%.
Non-store retailers led the declines, falling 1.2% from the previous month. Sporting goods and hobby stores also fell 0.9%. Meanwhile, sales at clothing and accessory stores rose 1.6% during the month, while gasoline sales rose 3.1%.
Elsewhere in economic data on Wednesday, a new CPI reading showed that increases in US consumer prices slowed during April, a welcome sign for investors as a series of hotter-than-expected inflation rates at the start of the year fueled inflation. A tougher stance from the Federal Reserve on interest rate cuts.
Read more: Inflation is ongoing, and prices rise and fall
As the Federal Reserve moves to keep interest rates high for longer than initially expected, economists have been closely monitoring any signs of weakness in the US economy.
Wednesday’s retail sales were the latest in a series of recent economic data that showed signs of weak economic growth.
In April, the US economy added fewer jobs than expected, while unemployment rose unexpectedly and wage growth declined. Other data also showed a contraction in manufacturing activity in April and weekly unemployment claims reached their highest level since August 2023.
“Consumer spending is slowing as higher interest rates weigh on interest rate-sensitive spending and as the labor market slows,” Michael Pearce, deputy chief US economist at Oxford Economics, wrote in a note to clients. “With overall balance sheets solidifying and the labor market slowing rather than collapsing, we expect the slowdown to remain gradual.
“The economy’s resilience frees the Fed to focus on incoming inflation data to guide its interest rate decisions.”
This is a breaking news post and will be updated with more context.
Josh Schaeffer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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