The value of retail purchases, unadjusted for inflation, were little changed from a month earlier after a revised 0.6% March increase. — Bloomberg
NEW YORK: US retail sales stagnated in April after downwardly revised gains in the prior two months, indicating high borrowing costs and mounting debt are encouraging greater prudence among shoppers.
The value of retail purchases, unadjusted for inflation, were little changed from a month earlier after a revised 0.6% March increase, Commerce Department data showed Wednesday. Much of the spending during the month was on necessities, such as food and fuel.
The median forecast in a Bloomberg survey of economists called for a 0.4% rise. Excluding cars and fuel, sales dropped 0.1%.
Seven out of 13 categories posted sales decreases, led by a pullback at non-store retailers and sporting goods and hobby merchants. Receipts at petrol stations rose 3.1% as prices advanced, while auto sales declined.
The sales figures indicate a softening in otherwise resilient consumer demand that’s been bolstering the economy. While a still-healthy labour market is providing the wherewithal to spend, elevated prices and interest rates risk further squeezing household finances and limiting discretionary purchases.
Household debt reached a record high in the first quarter and the proportion of consumers struggling to repay debts rose, the Federal Reserve Bank of New York reported Tuesday. With budgets becoming tighter, Americans are growing less upbeat.
Separate figures Wednesday showed a measure of underlying inflation cooled in April for the first time in six months, indicating price pressures are abating gradually and supporting the US Federal Reserve’s intent to keep interest rates higher for longer. — Bloomberg
