U.S. retail sales rose 0.5% in April compared to the previous month, as higher gasoline prices forced consumers to cut back on discretionary spending, according to data released Thursday by the Commerce Department.
Impact of Rising Gas Prices
The increase was largely driven by a 2.1% jump in sales at gas stations, reflecting higher pump prices. Excluding gasoline, retail sales edged up just 0.2%, indicating that consumers had less money to spend on other items.
Sales at auto dealers climbed 0.8%, while furniture and home furnishing stores saw a 0.6% gain. However, spending at restaurants and bars fell 0.3%, and clothing stores reported a 0.2% decline.
Economic Context
The modest overall gain suggests that while consumer spending remains resilient, high inflation and rising fuel costs are beginning to weigh on household budgets. Core retail sales, which exclude volatile categories like autos and gas, increased by 0.3%.
Economists had expected a 0.4% monthly rise, making the actual figure slightly above forecasts. Year-over-year, retail sales were up 3.8% in April.
The report comes as the Federal Reserve continues to monitor inflation trends, with interest rates expected to remain elevated until price pressures ease further. Consumer spending accounts for about two-thirds of U.S. economic activity.
