May 16, 2023 - Economy

April's retail sales numbers show consumers are shopping

Data: Commerce Department; Chart: Axios Visuals

Retail sales are on the upswing for the first time since January.

Why it matters: Shoppers had been pulling back on spending, raising fears that the American consumer's habits — the bedrock of the economy — were starting to show cracks.

  • April's numbers, however, show shoppers picking up momentum.

By the numbers: Retail sales rose 0.4% in April, softer than Wall Street's expectations but breaking a streak of monthly declines. That compares to a 0.7% decline in the prior month (which was revised up from the initially reported 1% drop).

  • Online retailers (+1.2%), health and personal care stores (+0.9%) and restaurants (+0.6%) are among the categories with the biggest monthly jumps in spending.
  • Sporting goods stores (-3.3%) and furniture shops (-0.7%) are among those that declined.

Worth noting: "Core retail sales" — which exclude gas, autos and building materials — comprise the consumer spending component of the GDP report. They rose an impressive 0.7%.

What they're saying: "The rebound in consumer spending does not alter our view that the Fed will pause its rate increases," Nationwide chief economist Kathy Bostjancic wrote in a note.

  • "It will keep officials holding onto a tightening bias – i.e. they are more likely to raise rates further this year than cut rates."
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