Retail sales growth loses pace in April

Latest reading: Retail sales expanded 0.1% month-on-month in seasonally adjusted terms in April (March: +1.7% mom), a month which saw the U.S. impose a 10% tariff on many foreign goods and far higher levies on China. The reading was slightly above market expectations. However, core retail sales—which exclude volatiles like cars and fuel—shrank and undershot market expectations. On an annual basis, retail sales increased 5.2% in April, matching March’s expansion. Meanwhile, annual average retail sales growth rose to 3.5% in April (March: +3.3%).

Panelist insight: Digging deeper into the latest data, TD Economics’ Ksenia Bushmeneva said: “Retail sales were little changed in April, but the easing in activity comes on the heels of a surge in March as consumers rushed to front-load purchases ahead of anticipated tariffs. There continued to be some evidence of this front-loading in April, with auto sales remaining at elevated levels, and consumers still purchasing large ticket items like furniture, electronics, and building materials. Households also showed a continued willingness to spend on discretionary items, as evidenced by another month of strong growth in bar and restaurant sales. While increased spending on goods—particularly cars – can be attributed to efforts to get ahead of potential tariff-related price hikes, robust spending on services like dining out suggests that consumer spending remains relatively resilient, despite downbeat sentiment.”

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