US Retail Sales Rise 0.9% in April as Consumers Deal With Price Hikes

The pace of retail sales in the U.S. slowed for the fourth consecutive month in April as higher prices offset curtailed spending enough to lift the key economic benchmark by 0.9%. While still positive, that rate is down from a revised 1.4% increase posted in March and the 2.7% gain in retail sales posted in January the Census Bureau reported on Tuesday (May 17). 

Shopping for Mother’s Day and Easter helped lift sales at florists and other so-called miscellaneous retailers by 4.0%, followed by a 2.1% increase in non-store or eCommerce sales and a 2% increase in bars and restaurants. Furniture, electronics, clothing and personal care and health products all also rose about 1% for the month.

On the weak side, a temporary decline in fuel prices saw gas station sales fall 2.7% last month, as well as an unexpected dip in the vast sporting goods, hobby, musical instrument and book stores category.

Economists surveyed by The Wall Street Journal forecast that the report would show an increase of 1%. The monthly report measures consumer spending both online and in-store at restaurants and retailers. 

The figures in the report aren’t adjusted for inflation. Consumer spending accounts for about 70% of U.S. economic activity.

Nine of the 13 retail categories increased in April, the report showed, but the rise could reflect any combination of the higher prices paid due to inflation and an increase in the number of goods or services people purchased. Real spending data will be released next week.

Stephen Stanley, chief economist at Amherst Pierpont Securities LLC, told The Wall Street Journal that spending on goods — the majority of the report — is slowing down as prices increase. 

See also: Gen’l Merchandise, Appliances Offset Weak eComm as March Retail Sales Rise 0.5%

Runaway inflation wreaking havoc on people’s budgets didn’t stop spending from increasing from January through March. Sales for eCommerce merchants in March dropped 6.4%, the single-largest decline in 16 major categories.

Total sales for February through April 2022 were up 10.8% percent, with retail trade sales up 0.7% from March, and up 6.7% from last year. Gas was up 36.9% from April 2021, while food services and drinking establishments saw a 19.8% increase over 2021.

Related: Mastercard: April US Retail Sales Up 7.2% YoY

According to Mastercard’s SpendingPulse, in-store sales were up 10% in April compared to the same time last year, while eCommerce sales dropped 1.8% during the same period.