Retail sales slow in April after a spending splurge as Americans sought to front-run tariffs
Retail sales slow in April after a spending splurge as Americans sought to front-run tariffs
By CHRISTOPHER RUGABER and ANNE D’INNOCENZIO, Associated Press Business Writers
WASHINGTON (AP) — U.S. consumers spent slightly more at retail stores last month after ramping up their shopping in March to get ahead of tariffs.
Sales at retail stores and restaurants rose just 0.1% in April from March, the Commerce Department said Thursday. That is much lower than the previous month’s 1.7% gain, which reflected a surge in car sales as consumers sought to get ahead of President Trump’s 25% duty on auto imports that went into effect this month.
Last month’s tiny increase after the March surge makes it harder to get a clear read on consumer spending trends and reflects the ongoing turmoil and uncertainty in the economy in the wake of Trump’s stop-and-go tariff policies. Many publicly-traded companies have withdrawn or held off on the traditional practice of forecasting their revenues and earnings for the rest of this year because the economic landscape has become so chaotic.
Meanwhile, Americans are increasingly gloomy about the economy’s prospects, according to sentiment surveys, but it’s not yet evident whether that will translate into reduced spending and slower economic growth.
In April, sales were flat or down for many retailers: They plunged 2.5% at sporting goods stores, which saw prices jump last month, according to the government’s inflation report earlier this week. Sales dropped 0.4% at clothing stores, while they ticked down 0.2% at health and personal care stores and slipped 0.1% at auto dealers.
Gas station sales dropped 0.5%, even as prices declined 0.1%. The figures aren’t adjusted for price changes.
Still, there were signs that at least some Americans were willing to spend. Sales at restaurants and bars jumped a healthy 1.2% last month, a sign many consumers boosted their discretionary spending.
And sales at home and garden centers jumped 0.8%, the biggest gain since 2022, which suggests Americans are pursuing more home renovations as elevated mortgage rates cooled home sales.
Trump imposed sky-high tariffs on imports from China last month that fueled fears of a recession, higher inflation, and even the specter of empty shelves by the winter holidays. But on Monday the U.S. and China announced a deal that sharply reduced the duties, partly assuaging those concerns.
Retailers still face a lot of uncertainty around tariffs and how shoppers will react to higher prices after several years of sharply rising costs.
A government report, released Tuesday, showed that inflation cooled for the third straight month in April, though economists and many business owners expect inflation will climb by this summer.
Trump had imposed massive 145% import taxes on Chinese goods last month, thought they were reduced to 30% for the next 90 days. China reduced its retaliatory duties to 10% from 125%.
Also Thursday, retail giant Walmart said its sales grew at a solid pace in the quarter ended April 30, as their customers stepped up purchases of groceries, toys, automotive goods and kid’s clothes. Yet profits slipped and CEO Doug McMillon said the company would soon raise prices to offset the impact of tariffs.
Retailers and importers had largely stopped shipping shoes, clothes, toys, and other items when the duties were so high, raising worries about empty shelves for the key back-to-school and holiday seasons. But many are now scrambling to resume shipping their goods from China while there is a pause in the trade war.
While many retailers and suppliers are relieved with the reduced tariffs, they still face a lot of hurdles. For one, they’re bracing for higher costs for shipping and freight as competition heats up to get their goods on shipping containers.
San Francisco resident Elenor Mak, whose company Jilly Bing manufactures Asian American dolls in China, said she feels some relief that she has a more realistic path forward but the challenges are far from over.
Mak is talking to her factories to see whether her dolls can be produced in time for the winter holidays, but she fears she will be at the back of the production line because she is a small business. She also is unsure about how to price her goods and said she is bracing for cost increases across the board, from third-party testing fees to freight costs.
Before the tariff wars, her dolls had an average selling price of $68. She worries about sending confusing messages to shoppers: “How do you explain: ‘We weren’t going to restock—but now we might—and it could cost 30% more?’” she asked. “We’re doing our best to plan, but we’re still navigating a lot of unknowns.”
D’Innocenzio reported from New York City.
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