US retail sales slowed in April, producer prices unexpectedly fell
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The news: US retail sales growth slowed in April, as consumers pulled back on spending amid tariff concerns, while producer prices dropped due to weakening demand for services.
The numbers: Retail sales rose 0.1%, after a revised 1.7% surge in March, while core retail sales fell 0.2%, according to the Commerce Department.
Seven of 13 categories declined, including cars, apparel and gasoline. Restaurant and bar spending rose 1.2%.
Meanwhile, the producer price index unexpectedly fell 0.5% during the month, the most in five years. That was driven by a 0.7% drop in services prices—the largest since data began in 2009—due to lower margins in trade services, airfares and accommodation, according to the Labor Department.
The PPI rose 2.4% over the year to April, after climbing 3.4% in the year to March.
The context: Tariffs introduced in April and a temporary US-China tariff truce have disrupted supply chains. Consumers pulled back on spending, and companies like Walmart are preparing to raise prices.
Despite subdued April inflation data, the Fed and analysts have warned of possible upcoming price pressures. Although this week’s 90-day tariff cuts between the US and China have triggered a rush to secure China-made goods after orders had paused when tariffs hit 145%, Reuters reported.
The sources: US Bureau of Labor Statistics, US Census Bureau
