Americans curbed their spending last month in the face of a stubborn inflation rate and continuing high interest rates.
According to data released Wednesday by the Commerce Department, retail sales went unchanged in April, coming in well below economists’ expectations, and follow a revised 0.6% pace in March. Sales rose 0.9% in February, but fell 1.1% in January.
Excluding gas prices and auto sales, retail sales fell 0.1%, the Associated Press reported.
Retail sales were also dragged down by a 1.2% drop in online business, reflecting a new sales event at Amazon and the earlier timing of Easter this year, Michael Pearce, deputy chief U.S. economist at Capital Economics, told the AP. Business at electronics stores was up 1.5%. Sales at home furnishings stores slipped 0.5%. Sales at clothing and accessories stores posted a 1.6% gain.
“Consumer spending is slowing as elevated interest rates weigh on rate-sensitive spending and as the labor market cools,” Pearce wrote in a report published Wednesday. “The resilience of the economy frees the Fed to focus on the incoming inflation data to guide its rate decisions, which we think will improve over the coming months and prompt the Fed to begin gradually easing rates beginning in September.”
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