Americans unexpectedly stopped spending more in April compared to March. This happened because prices kept going up, making it harder for people to borrow money at reasonable rates.
According to the Commerce Department, retail sales stayed the same in April, which was much lower than what experts thought would happen. In March, sales had gone up by 0.6%, but now they didn’t change at all. February had seen a 0.9% increase, while January had a decline of 1.1% due in part to bad weather.
When you don’t count sales from gas and cars, retail sales actually went down by 0.1%. Online businesses also saw a decline of 1.2%, partly because of a big sales event at Amazon and because Easter was earlier this year.
Customer checks out of a Walmart (Via Joyner Hazelwood/Getty Images)
However, electronics stores did better, with sales up by 1.5%. On the other hand, sales at home furnishings stores dropped by 0.5%, while clothing and accessories stores saw a 1.6% increase.
The report on retail sales came out on the same day as the government’s report on consumer prices. It showed that inflation slowed down a bit last month, which might be a relief for the Federal Reserve and President Biden’s team as they look ahead to elections.
Michael Pearce, an economist, noted that consumer spending is slowing because higher interest rates are making people think twice about spending too much. Despite this, he thinks the economy is strong enough that the Federal Reserve can focus on changing prices, which might lead them to lower rates starting in September.
