US Retail Sales Edge Up in April Amid Iran War-Driven Gas Prices

Retail sales rose 0.5 % in April to $757 billion, 4.9 % above a year earlier. Excluding autos and gasoline, sales grew 0.3 %. Furniture, auto, department-store and clothing sales fell 2 %-3 %; electronics, online retailers and restaurants posted gains.

April retail sales gain momentum despite inflation and weak consumer sentiment

The war that began in late February between the United States and Iran disrupted the Strait of Hormuz, cutting off oil flow. Gasoline prices rose 12.3 % in April, lifting the average to $4.53 per gallon—$1.35 above a year earlier.

US Retail Sales Rose Again, But Higher Gas Prices Did The Heavy Lifting

Unemployment stayed at 4.3 % as employers added 115,000 jobs. CPI rose 3.8 % YoY; PPI jumped 1.4 % MoM. Tax refunds $323 higher through April 25 than a year earlier. Import prices rose 1.9 % MoM. Core retail sales (excluding autos, gasoline, building materials and food services) rose 0.5 % MoM.

Retail sales, import prices surge as inflation pressures grow

Sal Guatieri (BMO) said tax refunds are sustaining spending but warned inflation could strain households. Oliver Allen (Pantheon) expects tapering refunds in May to expose consumers to fuel-price pressure. Neil Saunders (GlobalData) called the April lift “temporary.” Fed official Susan Collins noted low savings and wage growth lagging inflation for families.

Retail sales slow to 0.5% growth as inflation erodes affordability

The University of Michigan’s consumer-sentiment index fell sharply. Bret Kenwell (eToro) warned fuel-price spikes could strain budgets. PNC Financial said lower-income households are depleting refunds faster and cutting debt payments.

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Thomas Simons (Jefferies) called the consumer “fairly bulletproof,” yet the University of Michigan survey shows low sentiment and Whirlpool reports appliance demand at recession levels. Core retail-sales growth (0.5 %) differs from the headline figure, leaving true demand uncertain.

CNN

> “April retail sales echoed what we’ve heard across corporate conference calls for weeks now: The US consumer remains resilient despite soaring gas prices,” — Bret Kenwell, US investment analyst, eToro

CNN

> “It seems generally the U.S. consumer is not really changing their behavior really very much at all in response to the war in Iran,” — Thomas Simons, economist, Jefferies

New York Times

> “The consumer is strong enough to rule out rate cuts.” — Chris Rupkey, chief economist, fwd.bonds

UsNews and World Report

> “Retail sales continued to grow in April despite higher gas prices driven by the ongoing conflict in Iran, cautious consumer sentiment and the persistent concerns about sustained inflation,” — Matthew Shay, president and CEO, National Retail Federation

April retail sales gain momentum despite inflation and weak consumer sentiment

Rising gasoline costs erode disposable income and sustain inflation, likely keeping the Fed’s policy rate near the 3.5-3.75 % range and affecting borrowing costs.

US retail sales increase 0.5% despite inflation pressures

Tax refunds are expected to drop sharply in May, removing a spending cushion; continued high gas prices could curb discretionary purchases as the Fed maintains its rate stance.

Retail sales, import prices surge as inflation pressures grow