New federal data showed U.S. retail sales increased for a third consecutive month in April, though economists and private-sector analysts say households are becoming more selective in discretionary spending as fuel costs rise.
By yourNEWS Media Newsroom
American consumers continued spending through April despite mounting inflation pressures and sharply higher fuel prices, according to new federal data released Thursday, though signs are emerging that households are becoming more cautious about nonessential purchases.
The United States Census Bureau reported that retail sales rose 0.5% in April following a revised 1.6% increase in March.
Economists had broadly expected the April increase, with gasoline purchases accounting for a substantial portion of the monthly gain.
Sales at gasoline stations jumped 2.8% during the month as fuel prices continued climbing amid the ongoing conflict involving Iran and disruptions in global energy markets.
According to the American Automobile Association, the national average gasoline price reached $4.53 per gallon as of May 14, representing an increase of roughly 50% in just over two months.
President Donald Trump said he expects energy prices to decline once tensions in the Middle East ease.
Outside fuel purchases, consumer spending remained positive across several categories.
Retail activity increased at electronics and appliance stores by 1.4%, online and digital retailers by 1.1%, and restaurants and bars by 0.6%.
However, other sectors showed signs of weakness. Furniture sales fell 2%, clothing store purchases declined 1.5%, and automobile sales slipped 0.5%.
Excluding automobiles and gasoline, overall retail sales still rose 0.5%, suggesting that underlying consumer demand remained relatively stable despite higher energy costs.
The government’s retail sales “control group,” which excludes gasoline stations, restaurants, auto dealers, and building materials and is used in calculating gross domestic product, also rose 0.5%, exceeding many economists’ forecasts.
Analysts said several economic factors continue supporting consumer spending, including strong household finances, tax refund season, and steady employment growth.
The U.S. economy added approximately 115,000 jobs in April, contributing to continued labor market resilience despite broader concerns over inflation and borrowing costs.
At the same time, private-sector data suggests Americans may be pulling back in discretionary spending categories as household budgets tighten.
New figures from Bank of America showed total credit and debit card spending per household increased nearly 5% year over year in April. Excluding gasoline purchases, card spending still rose approximately 4%.
Bank of America analysts noted that spending growth slowed in “nice-to-have” categories, particularly clothing and travel.
“While the [year over year] growth in transactions was still positive for travel, it was just above zero for clothing in April,” Bank of America strategists wrote in a May 12 report.
“This may reflect not just higher prices but also a possible shift in consumers purchasing their apparel through different channels, such as big box stores (general merchandise), in order to save money.”
The bank also reported that late-April spending trends showed more noticeable slowing in discretionary purchases as the month progressed.
Consumer confidence has weakened sharply during the ongoing energy and inflation surge.
The University of Michigan’s May Consumer Sentiment Index fell to a record low, with respondents expressing growing concern over personal finances, inflation, and affordability.
Current economic conditions measured in the survey declined 9% from the prior reading.
Inflation pressures also intensified in April. The annual consumer inflation rate accelerated to 3.8%, its highest level in nearly three years, while core inflation — which excludes food and energy — climbed to 2.8%.
Higher prices, particularly for energy, are increasingly affecting household debt levels.
A recent survey by WalletHub found that 56% of respondents said rising energy costs were contributing to debt accumulation. About half reported their households were already struggling with debt burdens, while roughly 20% expected their financial situation to worsen during the next year.
Meanwhile, the Federal Reserve Bank of New York reported that total U.S. household debt reached a record $18.79 trillion during the first quarter.
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