Retail sales in the United States experienced a modest increase of 0.4% in April, following two consecutive months of decline, according to figures released by the U.S. Commerce Department on May 16. This increase was driven by consumer spending on online shopping and dining out, supported by a solid job market and a slight retreat in prices for some items. Car sales also rose, despite soaring prices.
However, consumers are facing challenges such as tightening credit and a potentially weaker job market in the second half of the year. Sales at car and auto parts dealers increased by 0.4%, while business at gas stations fell 0.8%, suggesting Americans cut back on holiday and spring break travel. Excluding car dealers and gas stations, retail sales rose 0.6%.
Economists predict that consumer spending may soon run out of steam due to various economic factors. There are signs that consumers are struggling with higher prices, and the job market is expected to weaken in the coming months. Consumer prices in the US rose again in April, with underlying inflation measures remaining high, indicating a slow and bumpy retreat from sharply higher prices.
Spending increased 1.2% at online retailers and 0.6% at restaurants and bars. However, department stores, electronic stores, sporting goods and hobby stores, as well as home furnishings stores, all experienced declines. Home Depot, the nation’s largest home improvement retailer, projected its first decline in annual revenue since 2009 and cut its profit and sales expectations for the entire year.
As major retailers like Walmart and Target report their quarterly earnings this week, they are offering more sales and tweaking membership programs to attract hard-pressed shoppers. Best Buy, the nation’s largest consumer electronics retailer, is launching a three-tiered membership program next month, including a lower-priced option costing less than $50 per year.