Business / Economy

The backbone of America’s economy was just dealt a serious blow

By Elisabeth Buchwald, CNN
3 minute read • Updated 10:14 AM EDT, Wed May 15, 2024

New York (CNN) — US consumers could be reaching their breaking point. After dealing with elevated inflation and the highest interest rates in decades, they’re starting to rein in their spending.

Last month, retail sales were unchanged from March, when spending increased by a downwardly revised 0.6%, the Commerce Department reported on Wednesday.

April spending missed the 0.4% increase that economists had projected, according to FactSet. The figures are adjusted for seasonal swings but not inflation. ... By comparison, a year ago, retail sales surged by 3%. ... Stripping away auto sales, April retail sales were up by 0.2% last month, matching economists’ expectations.

By sector, the biggest monthly increase in spending was at gas stations, where sales were up 3.1% in April compared to March. That’s likely a result of surging gas prices experienced in the previous two months. However, they’ve started to cool in recent weeks.

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