Amid the backdrop of ongoing tariff concerns and subsequent increases in consumer prices, April retail sales posted gains, according to data respectively issued earlier today by the United States Census Bureau of the Department of Commerce and the National Retail Federation (NRF).
Commerce reported that April retail sales, at $724.1 billion, were up 0.1% compared to March and up 5.2% annually. It also noted that total retail sales from February through April posted a 4.8% annual increase.
Retail trade sales decreased 0.1% from March to April and were up 4.7% annually, noted Commerce, non-store retailers, including e-commerce, posting a 6.1% annual gain.
NRF reported that April’s retail sales which are based on Census data and exclude automobile dealers, gas stations, and restaurants, fell 0.1% on a seasonally-adjusted basis, from March to April, and rose 5.1% annually, on an unadjusted basis. It added that core retail sales headed up 3.4% annually on a three-month moving average and were up 3.8% through April.
The CNBC/NRF Retail Monitor, powered by Affinity Solutions, which was released last week, observed that core retail sales were up 0.9% seasonally adjusted sequentially in April and increased 7.11% unadjusted annually, compared with increases of 0.4% sequentially and 5.07% annually in March.
“Consumers are still spending despite widespread pessimism fueled by rising tariffs,” NRF Chief Economist Jack Kleinhenz said in a statement. “While tariffs may have weighed on spending decisions, growth is coming at a moderate pace and consumer spending remains steady, reflecting a resilient economy. The momentum and willingness to spend is being supported by positive data on jobs and wages along with lower energy prices.”
NRF recently issued its annual retail sales forecast for 2025, in which it said that 2025 retail sales are expected to see annual growth between 2.7%-to-3.7%, coming in between $5.42 trillion-to-$5.48 trillion. In its 2024, forecast, the organization called for a 3.6% annual increase, at $5.29 trillion, and it added that the 2025 forecast matches up with its 10-year pre-pandemic average annual sales growth rate, at 3.6%.
Looking at key retail-focused metrics, NRF noted the following:
- non-store and online sales are expected to head up 7%-to-9% annually to between $1.57 trillion-to-$1.6 trillion (sales for this segment increased 8.1% annually in 20924 to $1.47 trillion);
- GDP growth is expected to come in slightly below 2%, compared to 2.8% in 2024, with NRF observing the 2025 projection is below figures seen in recent years; and
- PCE inflation is expected to be around current levels in the 2.5% range, adding that household balance sheets appear to be in good shape, with delinquencies on auto loans and car payments up but in line with pre-pandemic trends
On an NRF-hosted media on April 2, Kleinhenz said that the U.S. economy performed well in 2024, supported by resilient consumer spending and easing inflation.
“That favorable environment is expected to carry forward as we head further into 2025, but its trajectory is expected to decelerate as job growth moderates and policy uncertainty clouds the economic outlook,” he said.
Kleinhenz explained that public policy shifts have introduced a significant level of unpredictability, raising the probability of a much slower pace of economic activity.
“Any way you look at it, a lot is riding on the consumer,” said Kleinhenz. “While we do expect slower growth, consumer fundamentals remain intact, supported by low unemployment, slow but steady income growth and other household finances. “Consumer spending is not unraveling but consumer confidence is declining, thanks to the lingering headache of inflation and consumers’ anxiety over ever-changing tariff arrangements. But that doesn’t mean there will be an immediate decline in consumer spending.”
Neil Saunders, Managing Director of GlobalData, wrote in a research note that while the news has been dominated by the negative impact of tariffs, today’s retail sales numbers show that consumers have continued to advance their retail spending even in the face of rising uncertainty.
“In some ways, this is not all that surprising as the actual impact of tariffs on prices and products has not yet hit the shopper,” wrote Saunders. “The effect, to-date, has been much more around depressing consumer confidence—something that is worrying, but is more nebulous in terms of its influence on spending. The fact is that the amount people spend is influenced by two factors: their ability to spend, and their willingness to spend. Despite all the chatter, there has not been a significant deterioration in the former factor; this may come later in the year if economic conditions deteriorate, but it is not yet present to any large degree. The second factor is somewhat less important but, in normal circumstances, it should be modestly unhelpful to spending. However, this did not come to pass in April for several reasons.”
One major reason, he observed, is that the potential of tariffs to increase inflation has encouraged some consumers to pull forward spending to lock in current prices.
“Overall, we estimate that $3.2 billion of the core retail growth over last year is due to a pull-forward effect,” he noted. “This means, the pull-forward contributed 0.7 percentage points of the 5.1% of core retail growth. The pull-forward is particularly sharp in bigger ticket sectors like furnishings and electronics.”
