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Retail sales flat in April, falling short of Wall Street’s expectations

US consumption showed signs of slowing in April.

Retail sales remained stable during the month, according to Commerce Department data, reinforcing concerns about the consumer’s situation amid persistent inflation and higher interest rates.

This marks a slowdown from the 0.6% month-over-month increase seen in March. Economists had expected spending to increase by 0.4%, according to Bloomberg data.

“The fact that retail sales were stagnant in April is not necessarily a sign that the consumer is spent; but for once at least, it does not show continued evidence of an unstoppable consumer,” wrote Tim Quinlan , senior economist at Wells Fargo, in a note to clients.

Excluding automobiles and gasoline, retail sales fell 0.1% last month; expectations were for a 0.1% increase.

Non-store retailers, which include online sales, led the declines, falling 1.2% from the previous month. Sporting and leisure stores also declined by 0.9%. Meanwhile, sales at clothing and accessories stores increased 1.6% during the month, while gasoline sales increased 3.1%.

Wells Fargo’s Quinlan pointed to some one-off events likely attributed to the declines. According to Quinlan, an early Easter holiday and a sales event on Amazon (AMZN) likely boosted sales in March, while their absence in April led to exaggerated declines.

“The result is that many households boosted demand, buying a bunch of products online in March, so it’s not surprising to see (non-store retailers) down 1.2% in April,” said Quinlan.

Elsewhere in Wednesday’s economic data, a new reading of the Consumer Price Index showed that U.S. consumer price increases eased during the month of April, a welcome sign for investors as a series of higher-than-expected inflation figures at the start of the year fueled a more hawkish stance from the Federal Reserve on interest rate cuts.

Learn more: Inflation persists – this is where prices rise and fall

Given the Fed’s desire to keep interest rates high for longer than initially expected, economists are closely watching any signs of weakness in the U.S. economy.

“April’s CPI moderation is welcome after a string of strong first-quarter numbers and keeps alive the prospect of a Fed rate cut in September,” wrote Nationwide chief economist Kathy Bostjancic. in a note to clients this morning. Retail sales in April further support a rate cut in September.

Wednesday’s retail sales figures are just the latest in a string of recent economic data that have shown signs of slowing economic growth.

In April, the U.S. economy created 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 jobless claims reaching their highest level since August 2023.

“Consumer spending is slowing as high interest rates weigh on rate-sensitive spending and the labor market cools,” wrote Michael Pearce, Oxford Economics’ deputy chief U.S. economist, in a note addressed to his clients. “With strong overall balance sheets and a labor market that is cooling rather than collapsing, we expect the slowdown to remain gradual.

“The resilience of the economy allows the Fed to focus on upcoming inflation data to guide its rate decisions.”

GLENDALE, CALIFORNIA - DECEMBER 26: Shoppers gather at a Barnes & Noble store at the Americana at Brand shopping center on Boxing Day on December 26, 2023 in Glendale, California.  U.S. retail sales increased 3.1% year over year this holiday season, based on in-store and online purchases, according to Mastercard SendingPulse.  (Photo by Mario Tama/Getty Images)GLENDALE, CALIFORNIA - DECEMBER 26: Shoppers gather at a Barnes & Noble store at the Americana at Brand shopping center on Boxing Day on December 26, 2023 in Glendale, California.  U.S. retail sales increased 3.1% year over year this holiday season, based on in-store and online purchases, according to Mastercard SendingPulse.  (Photo by Mario Tama/Getty Images)

Shoppers gather at a Barnes & Noble store at the Americana at Brand shopping center on Boxing Day, December 26, 2023, in Glendale, California. (Photo by Mario Tama/Getty Images) (Mario Tama via Getty Images)

Josh Schafer is a reporter for Yahoo Finance. Follow him on @_joshschafer.

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News Source : finance.yahoo.com
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Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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