Retail sales rose 0.4% in April, from the previous month, representing only half of the growth that Wall Street had expected.
Economists had projected sales would rise 0.8% over the prior month after a surprise drop in March. That decline was revised to -0.7% after initially coming in at a drop of 1%.
Excluding gas station and automotive sales, retail sales rose 0.6% in April. Six of the 13 categories highlighted in the release saw declines from a month ago. Sporting goods and hobbies saw the largest decline of any category, falling 3.3% from the last month and 5.4% from last year. Furniture and home furnitures stores declined 0.7% from last month and 6.4% from April last year. Growth at miscellaneous store retailers and nonstore retailers, which includes online sales, helped keep total sales higher than the month prior.
“Consumers remain inclined to spend though they are becoming more selective in their purchases,” Oren Klachkin Oxford Economics Lead US Economist wrote on Tuesday. “A stronger-than-expected handoff to Q2 indicates the main engine of GDP growth continues to hum. However, with storm clouds gathering on the horizon, we think consumer spending will soon run out of steam.
“We expect a weaker labor market, depleted excess savings buffers, tighter credit standards, and high prices will make consumers less inclined to spend in H2.”
The report, released by the Commerce Department, offers a snapshot of consumer spending at a time when the Federal Reserve has been raising interest rates to curb inflation. The retail sales increase in April comes as consumer prices rose at their slowest pace in two years during the month.
The report comes amid a week of highly anticipated quarterly results from retailers. Home Depot reported worse-than-expected earnings on Tuesday morning as revenue fell 4.2% from the same quarter last year.
Home Depot CEO Ted Decker said the company had “expected that fiscal 2023 would be a year of moderation for the home improvement market.”
Target (TGT) TJX (TJX) Walmart (WMT) and Alibaba (BABA) are all expected to report later in the week.
Josh is a reporter for Yahoo Finance.
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