Tariff-Related Inflation Fears Kept Consumers Spending in April

Terry Lane

Thu, May 15, 2025, 10:29 AM 2 min read

• Consumer spending grew 0.1% successful April, maintaining a spending streak spurred by tariffs.

• Retail spending surged successful March arsenic consumers tried to get up of terms increases they fishy the tariffs volition cause, and economists said this month's retail income numbers indicated that didn't alteration arsenic caller polices were implemented.

• Retail income volition proceed to beryllium an important measurement to ticker successful the coming months, arsenic forecasters expect a slowdown that could impact the full economy's growth.

A cardinal indicator of the interaction of tariffs connected the system isn’t flashing informing signs yet, arsenic retail income maturation continued successful April.

While slower than March’s surge, retail income accrued by 0.1% successful April. The measurement of income astatine retail stores was successful enactment with estimates of economists surveyed by The Wall Street Journal and Dow Jones Newswires. Last month’s income maturation figures were revised upward to bespeak 1.7% growth, arsenic shoppers rushed to acquisition items up of imaginable U.S. tariffs.

“[April's 0.1% growth] is overmuch much awesome than it sounds, arsenic it means March's immense gains were maintained,” wrote Moody’s Economist Scott Hoyt.

Economists are watching retail income arsenic an important awesome connected whether consumer fears astir President Donald Trump’s tariffs are making them hesitant to walk money.

So far, poor user sentiment surveys haven’t resulted successful a meaningful diminution successful spending, chiefly arsenic radical unreserved to bargain items earlier tariffs rise prices. However, economists inactive expect a slowdown arsenic tariffs enactment done the economy.

“Going forward, we expect further weakness successful user spending arsenic wage backmost from the front-loading of depletion up of the tariffs, higher tariff-induced prices, precocious borrowing rates, and a softening successful employment gains that volition measurement connected aggregate income gains for households,” Nationwide Chief Economist Kathy Bostjancic said.

Consumer spending powers the economy, representing astir two-thirds of the U.S. economy, with goods purchases making up astir a 3rd of spending levels. Retail sales, successful particular, tin illuminate tariffs’ interaction connected consumers due to the fact that they bespeak spending connected goods similar cars, gathering supplies, sporting goods, and toys. Many items tracked by the measurement are manufactured successful overseas countries and subjected to import taxes.

“The retail income figures successful the coming months instrumentality connected further value arsenic they service arsenic a harbinger of the interaction of tariffs connected the broader economy,” Wells Fargo economists wrote.

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