April Retail Sales - Solid Spending

April retail sales up 8.2% year-over-year; basically flat after inflation.  In spite of elevated inflation, consumers continued to spend at a robust pace in April.  Increased spending on gasoline (+37% YoY) accounted for a large portion of the nominal increase, but strength was also evident in food services and drinking places (+19.8%), brick and mortar retail (+18.6%), and non-store retail (+12.7%).  Importantly, these results built on a difficult prior-year comparison (retail sales jumped 53% in April 2021).  The data suggests Americans are still spending on merchandise at a rapid clip even as prices rise at the fastest pace in 40 years.  Looking forward, we continue to expect spending patterns to shift towards services like travel and entertainment as long as pandemic-related health concerns remain muted.  Historically, real year-over-year declines in retail spending (as seen last month) have been one of many leading indicators of a recession although this indicator alone has proven more volatile and has produced several false positives over the years.  We are encouraged by a solid outcome today and in the context of other recession indicators we monitor including unemployment levels and the yield curve, we continue to believe the likelihood of entering a recession in the next twelve months remains low.

April retail sales up 0.9% month-over-month (+0.6% adjusted for inflation).  The overall value of retail purchases increased 0.9% in April after an upwardly revised 1.4% (0.5% originally reported) rise in March.  The April outcome included an 4.0% jump in brick and mortar retail stores and 2.2% increase in motor vehicle & parts dealers.  Gas receipts declined 2.7% in the month likely reflecting lower prices after a Russia/Ukraine induced spike in March.  Gas prices have been on the rise again in May, which is likely to lead to an increase in this category in the next report.