U.S. Retail Sales (April 2025)
Ksenia Bushmeneva, Economist | 416-308-7392
Date Published: May 15, 2025
- Category:
- U.S.
- Data Commentary
- Consumer
Retail sales take a breather in April
- Retail and food services sales were little changed in April, edging up by just 0.1% month-on-month (m/m). The pause in activity in April comes after an outsized gain in March, which was revised higher to 1.7% m/m (previously 1.5% m/m).
- Motor vehicle sales and parts edged lower by 0.1% m/m, though that came from very elevated levels as households continued to purchase vehicles ahead of the tariffs. Sales at gasoline stations were also lower, declining for the third consecutive month (-0.5% m/m) due to lower prices at the pump. Meanwhile, building materials and equipment stores had another decent month of growth, with sales rising by 0.8% m/m.
- Sales in the "control group", which excludes the volatile components above (i.e., gasoline, autos and building supplies) declined by 0.2% m/m, well below expectations for a 0.3% gain.
- Sales pulled back across most of the remaining categories, particularly in areas that saw large gains in March, including sporting goods & hobby stores (-2.5% m/m) and miscellaneous store retailers (-2.1% m/m). Furniture & home furnishings and electronics & appliance stores bucked the trend, with sales increasing by 0.3% m/m in each category. Online sales also edged modestly higher (+0.2%).
- Sales at bars and restaurants remained strong, rising 1.2% m/m. This comes on the heels of an upwardly revised 3% m/m growth in March (previously reported as 1.9%).
Key Implications
- Retail sales were little changed in April, but the easing in activity comes on the heels of a surge in March as consumers rushed to front-load purchases ahead of anticipated tariffs. There continued to be some evidence of this front-loading in April, with auto sales remaining at elevated levels, and consumers still purchasing large ticket items like furniture, electronics, and building materials. Households also showed a continued willingness to spend on discretionary items, as evidenced by another month of strong growth in bar and restaurant sales. While increased spending on goods—particularly cars – can be attributed to efforts to get ahead of potential tariff-related price hikes, robust spending on services like dining out suggests that consumer spending remains relatively resilient, despite downbeat sentiment.
- The current divergence between forward-looking consumer sentiment and actual spending activity reflects both the front-loading of purchases and the still-resilient underlying economic fundamentals (report). The labor market continues to show strength, with job growth averaging 155,000 per month over the past three months, and wage growth remains positive (commentary). As for inflation, there have been no significant signs of price pressures stemming from tariffs so far (commentary). Corporate efforts to stockpile goods and limit the pass-through of costs to consumers appear to be containing price increases, at least in the short term. The temporary truce with China and the reduction in reciprocal tariffs should further ease pricing pressures in the near term. Looking through the recent volatility, we expect consumer spending to advance by around 1% in the second quarter as the boost from pre-emptive shopping fizzles out.
Disclaimer
This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.