A shopper pushes a child in a cart while browsing big-screen televisions on display in the electronics section of a Costco warehouse on March 29, 2022, in Lone Tree, Colorado. The Commerce Department said that the increase was driven by greater sales of cars, electronics, and at restaurants. Even adjusting for inflation, which was 0.3% on a monthly basis in April, sales increased.
The Tuesday report also showed that sales in March were revised much higher, to a gain of 1.4%, from 0.7%. As a result, spending even rose that month after adjusting for inflation, which surged to 1.2% as gas prices rose. The revision suggests the economy likely shrank by less than the 1.4% contraction that was reported last month.
Still, economists are watching closely to see if consumer spending can continue to outpace inflation. Slower spending would drag down the economy’s growth. While that might bring down inflation, it would also threaten to push the economy into recession. Still, the robust sales figures in the government’s report are also impressive since retail sales covers only about one-third of consumer spending, with the rest going to services such as travel, haircuts and health care. Airlines and hotels are also reporting strong sales as more people are taking trips after postponing travel for two years.The retail sales figures suggest that some supply chain snarls may be easing. Sales at auto dealers rose 2.
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