U.S. Retail Sales Climb 0.5% in April, Bolstered by Gas and Online Spending

U.S. retail sales advanced 0.5% in April, aligning with consensus forecasts and reflecting a 4.9% increase over the past year. Excluding the automotive sector, sales expanded by 0.7%, marking a 6.3% rise year-over-year. Upward revisions to previous months further strengthened these figures.

The uptick in April was partially driven by a 2.8% surge in gasoline station sales, as national gas prices reached their highest levels since 2022. Nonstore retailers, encompassing internet and mail-order businesses, also showed robust growth, contributing significantly to the overall increase. Conversely, auto sales experienced a 0.4% decline, and clothing store sales also decreased.

"Core" retail sales, which exclude volatile categories such as automobiles, building materials, and gasoline to better estimate Gross Domestic Product (GDP)¹, increased by 0.5% in April, or 0.8% including revisions. This category saw its largest boost from nonstore retailers, which climbed 1.1% in April, marking the third instance of growth exceeding 1.0% in the last four months. Over the past year, sales in this segment have surged 11.1%, positioning it among the strongest core categories. However, clothing and furniture stores were notable exceptions, with sales declining 1.5% and 2.0% respectively. The restaurant and bar sector, providing the sole insight into service-sector spending within this report, advanced 0.6% in April but has lagged overall sales with a modest 2.7% increase over the past year.

While nominal retail sales have seen a 4.9% increase over the last year, it is crucial to consider the impact of inflation. Inflation-adjusted, or "real," retail sales² have grown by a mere 1.1% over the same period and remain below their April 2022 peak. This indicates a more subdued overall spending trend when accounting for rising prices. Furthermore, higher-than-average tax refunds may be temporarily bolstering consumer spending power. In related economic news, initial jobless claims increased by 12,000 to 211,000 last week, while continuing claims rose by 24,000 to 1.782 million. Import prices climbed 1.9% in April, and export prices surged 3.3%, representing the largest monthly increases since 2022 for both metrics.

Key terms

1. Gross Domestic Product (GDP): The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

2. Real (inflation-adjusted) retail sales: Retail sales figures that have been adjusted to remove the effects of inflation, providing a more accurate picture of actual spending power and consumption volumes.