In April, retail sales growth in the United States slowed down, indicating signs of weak consumer spending.

The growth of retail sales in the United States in April slowed significantly, indicating that consumers reduced spending on imported goods such as cars, sporting goods, and other categories amid concerns about tariffs leading to price increases. Data released by the US Department of Commerce on Thursday showed that retail sales in April increased by only 0.1% from the previous month, revised down from 1.7%, but still higher than the expected flat growth. Retail sales in April (excluding automobiles) increased by 0.1% from the previous month, below the expected 0.3% and revised down from 0.8%. Among the 13 categories in the report, 7 categories experienced declines. After experiencing a surge in car purchases last month, car sales slightly declined. As the only service category in the retail report, spending at restaurants and bars saw strong growth for a second consecutive month. Before President Trump imposed tariffs, American consumers made large purchases in advance, and the recent drop in data after strong growth in March suggests that consumers are cutting back on spending, exacerbating concerns about a slowdown in economic growth. With consumer confidence deteriorating, businesses, investors, and economists are cautious about the outlook. Earlier this week, the US and China reached a temporary agreement to ease trade tensions, easing concerns about US consumer spending and the overall economic outlook to some extent. However, Trump warned that these tariffs may escalate again, and forecasters predict that these tariffs will continue to push up inflation and weaken economic growth. Retail data shows that the so-called control group sales in April fell by 0.2%, indicating a weak start to the second quarter. Control group sales are an important indicator of consumer spending in the calculation of the Gross Domestic Product (GDP) by the government. This measure excludes sales at food services, automobile dealers, building material stores, and gas stations. Ahead of the release of this data, the Atlanta Fed's GDPNow model predicted that the US economy would grow by 2.3% in the second quarter, marking a significant rebound from the contraction earlier this year due to a surge in imports before tariffs. As more economic data is released in the coming weeks, this estimate may change. Federal Reserve officials are still uncertain about how tariffs will ultimately impact the economy and are maintaining interest rates for the foreseeable future. Policymakers have indicated that they are more inclined to control inflation rather than preemptively lowering rates. According to the CME FedWatch tool, the market currently expects the Fed to cut interest rates twice this year, with the earliest possible start in September, with a probability of about 51%. So far, tariffs have not triggered inflation. In April, the Consumer Price Index (CPI) rose lower than expected for the third consecutive month, indicating that businesses are not rushing to pass on the higher costs of tariffs to consumers. The decline in prices for services such as airfare and hotels also indicates a decrease in discretionary spending. However, another data released on Thursday showed an unexpectedly large drop in producer prices in April, the biggest in five years, largely reflecting a decline in profit margins, indicating that businesses are absorbing some of the impact of tariff increases. However, "bellwether for the US economy" Walmart Inc. reported solid quarterly sales earlier on Thursday, but indicated that tariffs and escalating economic turmoil mean that the world's largest retailer expects to start raising prices this month. The company said in a statement, "The lack of clarity in the current vibrant operating environment makes short-term forecasting extremely difficult." Energizer Holdings CEO Mark LaVigne stated, "The weakening consumer confidence and persistent inflation across the board may put pressure on sales in the short term... As we take all of these factors into account - tariffs, consumer confidence, and overall demand - we have adjusted our outlook for the remainder of the year." Nu Skin Enterprises Inc. CEO Ryan Napierski said during a May 8 conference call, "Overall, we continue to face macroeconomic pressures as uncertainty about the potential impact of tariffs on inflation and the dampening of global consumer confidence have led to continued caution around consumer purchasing of premium beauty and wellness products." Texas Roadhouse CEO Gerald Morgan added, "There are still concerns. We have questions about some of the things happening right now. But overall, our restaurants are packed." Retail sales data is not adjusted for inflation and primarily reflects purchases of goods, which account for a relatively small proportion of total consumer spending. Data on goods and services spending for April adjusted for inflation will be released later this month.