The increase in the overall cost of living in the United States has raised concerns about inflation. Despite these concerns, retail sales appear to be holding steady and even seeing some small gains.
The most recent report from the US Department of Commerce reveals that retail sales went up by 0.9% in April, slightly lower than the Dow Jones’ forecast of a 1% increase. Excluding the automotive sector, sales increased by 0.6%, surpassing the predicted 0.4% growth. Since these figures are not adjusted for inflation, it’s unclear if the gains are due to consistent consumer spending or inflationary effects on pricing.
Jeffrey Roach, the chief economist at LPL Financial, noted that the rise in retail sales for the fourth consecutive month indicates that consumers are navigating the inflation challenges. He mentioned that consumers might be using their savings to counterbalance the decrease in real wages. Roach expressed optimism that if pricing pressures ease, it could lead to an economic growth rebound in the second quarter.
Compared to the same period last year, retail sales have increased by 8.2%, rising to 10.9% when excluding automotive sales. Gasoline sales have also surged, likely driven by the soaring costs resulting from the Russian invasion of Ukraine. However, gas prices did see a slight decline in April from the peak levels seen at the start of the invasion.
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