US Retail Sales Growth Stalls in April as Consumers Brace for Tariffs, But Yearly Gains Remain Solid

US retail sales edged up just 0.1% in April 2025, falling short of consensus expectations for no change and marking a sharp slowdown from March’s robust 1.7% gain. The latest data signals a cooling in consumer momentum as shoppers face economic uncertainty and brace for higher prices driven by fresh tariffs.

 

Key Highlights:

 

April’s Tepid Growth: Retail sales rose 0.1% month-over-month, a significant deceleration from March’s 1.7% surge. Economists had forecast flat sales, so the slight uptick was a mild positive surprise, but it underscores growing caution among consumers.

 

Tariff-Driven Buying Patterns: Many shoppers pulled forward purchases in anticipation of rising prices due to new tariffs, especially on goods from China. This “stocking up” effect boosted March sales but left April with softer demand as households adjusted to the new price environment.

 

Core Retail Sales Mixed: Excluding autos, gasoline, building materials, and food services, core retail sales actually fell 0.2% in April after a 0.5% rise in March, highlighting underlying weakness in discretionary spending.

 

Year-Over-Year Strength: Despite the monthly slowdown, retail sales for the February-April period were up 4.8% compared to a year ago, and same-store sales climbed 4.3% year-over-year, reflecting resilient consumer fundamentals over the longer term.

 

Sector Winners: Digital products, electronics, appliances, and grocery stores posted the strongest gains, while sporting goods and hobby stores also outperformed. Beverage categories, especially ready-to-drink cocktails and tequila, continued to see double-digit growth.

 

Consumer Sentiment: While confidence has dipped amid economic uncertainty, low unemployment and steady income growth are helping to support spending. However, inflation on key items ticked up slightly to 2.3% in April.

 

The April report highlights a retail sector in transition, with consumers adapting to tariff-driven price pressures and shifting their buying patterns, even as underlying fundamentals remain broadly supportive.

 

Source: NRF, Yahoo Finance, NRSInsights, FloorDaily