Consumers continued to spend more last month despite the storm clouds many experts see on the horizon.
April retail and food service sales rose 8.2 percent from a year earlier and a seasonally adjusted 0.9 percent from March, according to the U.S. Census Bureau. Those gains were in line with what economists projected.
Apparel and accessories specialty stores were up 8 percent from a year ago and ahead 0.8 percent from March. And department stores rose 2.9 percent from a year ago and 1.1 percent from March.
Non-store retail sales, a category made up mostly of e-commerce, increased 12.7 percent from a year ago and were up 2.1 percent from March.
The outlook has been clouded by inflation at 40-year highs, increasing interest rates, continued pandemic and supply chain back ups and disruptions from Russia’s war in Ukraine.
On the other side of the equation, consumer balance sheets are seen as strong and unemployment is low.
But with prices so high on necessities like gasoline (currently averaging $4.52 a gallon, according to AAA) and food, there are growing questions about just where all those consumer dollars will go.
Retailer Walmart Inc. kicked the day off with first-quarter sales gains, but an annual profit outlook that was stepped back, with earnings per share now expected to slip 1 percent instead of the mid-single-digit gain projected in February.
On Monday, Moody’s Investors Service downgraded its outlook on the apparel and retail sectors to negative from stable.
“Retailers face deteriorating business conditions as they grapple with shipping delays, product shortages and inflation,” said Christina Boni, a senior vice president at Moody’s. “We expect sales to increase 2 to 4 percent, while operating profit is set to decline 1 to 3 percent over the next 12 to 18 months.”
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