Retail sales growth slows in April
Shoppers remained engaged in April, but their spending cooled compared to the previous month amid continued concern over tariffs on imported goods.
Overall retail sales in April were up 0.1% month over month and up 5.2% year over year, according to data released by the U.S. Census Bureau. That compared with an increase of 1.7% month over month in March as consumers stocked up to get ahead of the tariffs.
April’s core retail sales — excluding automobile dealers, gasoline stations and restaurants — were down 0.1% month over month but up 5.1% year over year. Core sales were up 3.4% year over year on a three-month moving average and up 3.8% for the first four months of the year.
“Consumers are still spending despite widespread pessimism fueled by rising tariffs,” said Jack Kleinhenz, chief economist, National Retail Federation. “While tariffs may have weighed on spending decisions, growth is coming at a moderate pace and consumer spending remains steady, reflecting a resilient economy. The momentum and willingness to spend is being supported by positive data on jobs and wages along with lower energy prices.”
A 2.5% drop in sales at sporting goods and hobby stores led the declines, with a 2.5% drop in April. Sales at department stores fell 1.4%. Online sales edged up 0.2%.
“As Q1 retail season kicks off, we are starting to hear more about the potential for consumer price hikes, including from Walmart today, and consumer response, including trade-down or spending pullbacks,” said David Silverman, senior director, Fitch Ratings. “Given recent declines in consumer sentiment and uncertainty around the evolving tariff policy and accelerating inflation, Fitch expects retail sales to modestly decline in 2025, driven by declines in discretionary categories that could reach mid-single digits.”
[READ MORE: Walmart earnings top Street; warns of higher prices from tariffs]
Fitch recently adjusted its outlook on U.S. retail to deteriorating from neutral given rising spending headwinds and increased operating challenges as retailers wrestle with the implications of an evolving tariff policy on sales outlooks and inventory decision-making, Silverman added.
