Retail sales rose 0.4% in April, representing only half the growth Wall Street expected from the previous month.
Economists had forecast sales to rise 0.8% from the previous month after a sharp drop in March. That decline was revised to -0.7% after initially coming in at a 1% drop.
Excluding gas station and auto sales, retail sales rose 0.6% in April. Six of the 13 categories highlighted in the publication saw declines from a month ago. Sporting goods and entertainment saw the biggest decline of any category, falling 3.3% from last month and 5.4% from last year. Furniture and home furnishings stores were down 0.7% from last month and 6.4% from April last year. Growth at other store retailers and non-store retailers, which includes online sales, helped keep total sales higher than the previous month.
“Consumers are more selective in their purchases but still prefer to spend,” Oxford Economics Lead US Economist Oren Klachkin wrote Tuesday. “A stronger-than-expected handover to Q2 indicates that the main engine of GDP growth continues to hum. However, as storm clouds gather on the horizon, we think consumer spending will soon run out of steam.”
“We expect a weak labor market, depleted excess savings buffers, tighter credit standards and higher prices to reduce consumers’ willingness to spend in H2.”
The report, released by the Commerce Department, provides a snapshot of consumer spending at a time when the Federal Reserve is raising interest rates to control inflation. Retail sales rose in April as consumer prices rose at their fastest 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 Tuesday morning as revenue fell 4.2% from the same quarter last year.
Home Depot CEO Ted Decker said, “The company expects fiscal 2023 to be a moderate year 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 Yahoo Finance reporter.
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