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Here’s what two experts had to say about April’s retail sales (as reported by the U.S. Census Bureau).

 David Silverman, senior director, Fitch Ratings:

“No major surprises as April retail sales, except auto and gas, were up about 3.5% relative to 2023, suggesting flattish volumes given a similar CPI reading also this morning. A modestly lower than expected CPI print does provide some hope that inflation is moderating, which could eventually improve consumer sentiment.”

“In April, discretionary goods categories and channels like electronics, home improvement, furniture, and department stores continue to underperform, driven by consumer spending pullback, shifts in spending priorities and comparisons to pandemic-era trends.” 

“Fitch expects the Q1 retail reporting season to be characterized by generally tepid revenue performance, although operating margins across the group could benefit from decelerating cost inflation and sharper inventory and expense planning. We also expect continued retrenchment from weaker players, particularly in competitive categories like apparel, similar to recent wide-scale closure announcements from names like Macy’s, Rue21 and Ted Baker.”

Claire Tassin, retail & e-commerce analyst, Morning Consult.

“Today’s retail sales report reflects a pullback in consumer spending that retailers have called out in recent earnings reports. Spending is unchanged from March to April, and the increase from April 2023 is just 2.7%, while the CPI for the same period is 3.4%. That indicates that the sales gains from a year ago are entirely attributable to inflation, not increased consumer demand.” 

“Home furnishing stores and sports and hobby retailers continue to struggle with large year-over-year declines. Even online retail — a bright spot in last month’s report — shrunk from the previous month (down 1.2%), though e-commerce is still up 7.5% year over year.”

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