Americans unexpectedly paused their spending in April as inflation continued to sting and elevated interest rates made taking on debt more burdensome.
Retail sales were unchanged, coming in well below economists’ expectations, following a revised 0.6% pace in March, according to Commerce Department data released Wednesday. Sales rose 0.9% in February. That comes after sales fell 1.1% in January, dragged down in part by inclement weather.
Excluding gas prices and auto sales, retail sales fell 0.1%.
Retail sales were also dragged down by a 1.2% drop in online business, reflecting a new sales event at Amazon and the earlier timing of Easter this year, according to Michael Pearce, deputy chief U.S. economist at Capital Economics. Business at electronics stores was up 1.5%. Sales at home furnishings stores slipped 0.5%. Sales at clothing and accessories stores posted a 1.6% gain.
The retail sales figure came out on the same day that the government issued its report on consumer inflation, which showed it cooled slightly last month after three elevated readings, likely offering a tentative sigh of relief for officials at the Federal Reserve as well as for President Joe Biden’s reelection team.
