U.S. Retail Sales Grew 0.9% in April
U.S. shoppers increased retail spending in April for the fourth straight month, taking on higher prices with inflation close to its highest level in four decades.
Retail sales—a measure of spending at stores, online and in restaurants—rose a seasonally adjusted 0.9% in April from the prior month, the Commerce Department said Tuesday.
Retail sales aren’t adjusted for inflation. That means that while consumers have continued to spend more, they are likely getting less due to rapidly rising prices.
In April, consumers spent more at bars and restaurants, on vehicles, furniture, clothing and electronics. However they pulled back on spending at grocery stores, on home improvement and sporting goods.
Receipts at gas stations also dropped as pump prices pulled back briefly from a sharp run-up related to the war in Ukraine. Gasoline prices have since risen again, hitting a record high this month.
Consumers are continuing to feel the pinch from high inflation, which rose 8.3% in April from a year earlier, according to the Labor Department’s consumer-price index.
Consumer spending, adjusted for inflation and seasonality, accelerated in the first quarter compared with the end of last year, according to the Commerce Department. Consumer spending is a driving force for the U.S. economy.
Still, there are signs that inflation is having an impact on retail businesses.
Walmart Inc.
said Tuesday that sales grew during the most recent quarter, while higher product, supply-chain and employee costs ate into profits. Inflation created more pressure than the company expected on margins, particularly in food and fuel, Walmart Chief Executive
Doug McMillon
said in a release.
Consumers have also shifted some spending to services from goods as a winter surge of Covid-19 from the Omicron variant faded and many people resumed more in-person activities.
JPMorgan Chase
& Co.’s tracker of credit- and debit-card transactions last week showed that consumer spending at restaurants and on entertainment picked up in early May.
Stephen Purtell,
interim chief financial officer at
Six Flags Entertainment Corp.
, said on an earnings call last week that despite recently rising Covid-19 cases, “people are just learning how to live within that environment, and they’re still going out.”
After many people earlier in the pandemic focused more of their spending at home, Mr. Purtell said, “now you see kind of a reversal of that and people wanted to get back out and enjoy experiences, and we don’t think that will change.”
Larry Isacson,
a retired information-technology executive in the pharmaceutical industry, took a trip to Las Vegas and Utah in April and paid $400 a night for a hotel in St. George, Utah.
“That would have seemed exorbitant a few years ago, for a room with not that many amenities,” he said. “I just basically had to swallow it and accept that that’s what the rate is, and I want to be there so I have to pay the rate.”
Mr. Isacson said that the hotels around where he lives in Laguna Niguel, Calif., appear to be doing well. He added, “Clearly people are in the mood to spend.”
Write to Harriet Torry at [email protected]
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