US Retail Sales Growth Slows In April As Tariff Pressures Weigh On Shoppers, Retailers

Consumer spending edged higher slightly in April, but the pace of growth slowed notably, official data on Thursday showed, as the impact of new tariffs began to ripple through the retail sector.

According to the Commerce Department, retail sales rose just 0.1% in April compared to the previous month. This figure was in line with economists' expectations but marked a sharp deceleration from March's revised 1.7% increase.

The slowdown comes as U.S. consumers and retailers start feeling the pinch from President Donald Trump's recent tariff moves.

Several companies plan to hike product prices even as they expect uneven consumer demand and likely further divergence between spending on essential and discretionary items. Retailers are also trying to adjust their sourcing to mitigate tariffs.

The full impact of tariffs — including shifts in consumer buying habits and pressure on corporate balance sheets — is expected to unfold gradually over several months.

Excluding autos, which are typically volatile, retail sales grew by 0.1%, falling short of the 0.3% gain economists had forecast and down from March's 0.8% rise.

Auto sales declined 0.1% in April, following a 5.5% surge the prior month.

Sales at electronics and appliance stores rose 0.3% in April, following a 1.5% increase in March.

On Thursday, Walmart (WMT), the sector's bellwether, said consumers should expect higher prices for everything from bananas to car seats.

"We're wired to keep prices low, but there's a limit to what we can bear, or any retailer for that matter," CFO John David told the Associated Press.

Retail sales reflect consumer spending at physical stores, online platforms, and restaurants, and are adjusted for seasonal variations.

Consumer Discretionary Select Sector SPDR Fund (XLY) is down 3.9% this year, while Consumer Staples Select Sector SPDR Fund (XLP) is up 2.1%.

On Stocktwits, retail sentiment was ‘bearish’ for the discretionary fund and ‘neutral’ for the staples fund.

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