In a sign that consumer demand may be fraying around the edges, spending at US retailers slowed sharply in April to 0.1% after a surge of 1.7% in March as shoppers rushed to beat President Donald Trump’s stiff tariffs.
The April data was worse than the 0.2% monthly rise economists polled by FactSet predicted.
Among the biggest monthly declines was motor vehicle and part sales, which declined to -0.1% in April from 9.4% in March.
Consumer spending is the backbone of the economy, accounting for two-thirds of gross domestic product. The steep drop in retail sales could lead to another quarter of disappointing GDP after the contraction seen last quarter.
The Trump administration’s haphazard tariff blitz in recent months has prompted consumer sentiment to deteriorate, according to various sentiment surveys. Now, Wall Street and the Federal Reserve are watching for signs of consumers pulling back in the face of high uncertainty.
Thursday’s report shows that consumer spending has clearly downshifted from the brisk pace of late last year, and that Americans’ buying sprints to get ahead of tariffs may already be over.
This story is developing and will be updated.
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