American consumers continued to spend in April 2022 despite high inflation. However, the figures reflect the smallest increase in retail sales in the last four months.
US retail sales rose 0.9% in April 2022 after an upwardly revised 1.4% growth in March, while in line with market forecasts. On an annualized basis, retail sales rose 8.2%.
So-called core retail sales, which exclude automobiles, gasoline, construction materials and catering services and are most closely linked to the consumer spending aspect of the country's gross domestic product, rose 1.0% in April.
Data from the Department of Commerce showed that the biggest increase was in sales at various retail stores (4%); automobiles and spare parts (2.2%); catering services (2%); and electronics and home appliances stores (1%).
At the same time, retail sales, on the contrary, fell by 2.7% at gas stations, by 0.5% in sporting goods, hobbies, musical instruments and books stores; and 0.2% in food and beverage stores.
Gas station prices fell briefly in April from their March highs. Since then, however, gasoline prices have set a new record, climbing the national average to $4.52 a gallon from $3.04 a year ago.
"American consumers continued to spend more at retail stores in April despite inflation as lower gasoline prices helped push up spending on essentials," said Tuan Nguyen, US economist at RSM. "But it won't last long as gasoline prices hit record highs in May."
The retail sales data comes at a time when US consumers continue to experience the biggest surge in inflation in decades.
The government reported last week that the CPI rose 8.3% in April from a year earlier, close to a 40-year high. The figure was higher than expected by economists and underscores that inflationary pressures in the economy remain strong.
There are other signs that inflation is starting to take its toll on consumers: Earlier Tuesday, the largest U.S. retail chain, Walmart (WMT), said its profits had fallen sharply due to rising prices for everyday goods such as food and fuel, and higher costs due to supply disruptions.
Rising inflation is offsetting the strong wage growth that American workers have seen in recent months: Real average hourly wages fell 0.1% in April from the previous month, according to the Department of Labor, as rising inflation eroded overall wage growth by 0.3%. On an annualized basis, real incomes fell 2.6% in April.
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