Retail sales rose by 0.4% in April, only half of the 0.8% growth that Wall Street analysts had estimated. Economists polled by Bloomberg had expected a large turnaround from the 1% decline in March, which was later revised to a 0.7% fall.
Excluding gas station and automotive sales, the report released by the U.S. Commerce Department indicated a 0.6% rise in retail sales. Six of the 13 categories that were mentioned in the report saw a decline in sales from the previous month. Sporting goods and hobbies experienced the largest dropoff, falling 3.3% from March and 5.4% compared to last year’s April.
This report offered investors an insight into how consumer spending was affected following the Federal Reserve’s aggressive interest rate policy in response to rising inflation. April’s sales increase came as consumer prices rose at their slowest pace in two years.
In addition to the retail sales report, several major retailers are set to release their first-quarter earnings this week, including Alibaba, Target, TJX, and Walmart. Home Depot released its Q1 earnings on Tuesday, with revenue declining by 4.2% compared to the previous year.
Home Depot CEO Ted Decker responded by saying that the company had “expected that fiscal 2023 would be a year of moderation for the home improvement market.”