Monday, June 24, 2024
HomeFinanceRetail sales April 2023:

Retail sales April 2023:

A shopper browses shirts at a clothing store in Atlanta, Georgia, US, on Tuesday, Feb. 14, 2023.

Dustin Chambers | Bloomberg | Getty Images

Consumers barely kept up with inflation in April, as retail sales increased but fell short of expectations, the Commerce Department reported Tuesday.

The advanced sales report showed an increase of 0.4%, below the Dow Jones estimate for 0.8%. Excluding auto-related figures, sales increased 0.4%, which was in line with expectations.

As the numbers are not adjusted for inflation, the headline increase equaled the 0.4% monthly rise in the consumer price index. On an annual basis, sales were up just 1.6%, well below the 5% CPI pace.

A 0.8% drop in gasoline sales held back the spending figures. Sporting goods, music and book stores posted a 3.3% decline, while furniture and home furnishings saw a 0.7% drop.

Miscellaneous store retailers led gainers with a 2.4% increase, while online sales rose 1.2% and health and personal care retailers saw a 0.9% rise. Food and drink sales climbed 0.6% and were up 9.4% on a 12-month basis.

Though the report indicated a struggling consumer, it was the first positive reading since January and followed a 0.7% decline in March. Treasury yields rose after the report as the initial reaction focused more on the positive ex-autos number, though stock market futures remained negative.

Consumers still face a tough road ahead.

Indications are pointing to higher interest rates ahead. In fact, Atlanta Federal Reserve President Raphael Bostic told CNBC on Monday that he thinks a rate hike would be more likely than the cuts markets have been pricing before the end of the year.

Consumers have been running up higher debts to deal with the persistently high inflation. Total debt rose above $17 trillion in the first quarter as higher rates pushed up borrowing costs for items such as mortgages and credit cards, according to a New York Federal Reserve report Monday.

“As the labour market continues to cool and the drag from the Fed’s aggressive monetary tightening feeds through, we suspect a further slowdown lies ahead,” wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics.

In a speech Tuesday morning, Cleveland Fed President Loretta Mester noted the “long-run costs” of inflation and stressed that the central bank is committed to returning inflation to the 2% target.

This story originally appeared on CNBC

- Advertisment -

Most Popular

Recent Comments