Sales are staying mostly consistent despite rising costs.
With the overall cost of living on the rise in the United States, fears of inflation are at an all-time high. In spite of these fears, however, it seems as though retail sales are still remaining more or less consistent, and even managing to make some minor gains.
According to the latest report from the US Department of Commerce, retail sales increased by 0.9% for April, just barely missing the Dow Jones estimate of a 1% increase. If you remove the automotive industry from the equation, then sales rose by 0.6%, which does beat out the pre-auto estimate of 0.4%. As these numbers are not adjusted for inflation, though, it’s not immediately apparent whether these gains are due to consistent consumer spending or just rising prices making up the difference.
“Retail sales in April show that the consumer is weathering the inflationary headwinds, rising for the fourth consecutive month,” Jeffrey Roach, chief economist at LPL Financial, said in a note to investors. “Core categories show signs that consumers are likely dipping into savings to offset the decline in real wages. If pricing pressures can moderate enough to relieve some of the pressure on consumers, we expect a rebound in economic growth in Q2.”
U.S. shoppers increased retail spending in April for the fourth straight month, economists say, as inflation held near its highest level in 40 years https://t.co/ldPgruEa0d
— The Wall Street Journal (@WSJ) May 17, 2022
Compared to this time last year, retail sales are up by 8.2%, 10.9% without the automotive industry. Sales of gasoline are also up, likely due to ballooning costs brought about by the ongoing Russian invasion of Ukraine, though gas costs did decline slightly in April compared to the highs they hit when the invasion first began.