Retail sales rise 0.9% in April as consumers show resilience

FILE - A shopper pushes a child in a cart while browsing big-screen televisions on display in the electronics section of a Costco warehouse, Tuesday, March 29, 2022, in Lone Tree, Colo. U.S. retail sales rose 0.9% in April, a solid increase that underscores Americans ability to keep ramping up spending even as inflation persists at nearly a 40-year high. The Commerce Department said Tuesday, May 17, that the increase was driven by greater sales of cars, electronics, and at restaurants.

The strength of the consumer makes a recession much less likely, at least anytime soon, Ashworth said. But it also keeps the pressure on the Federal Reserve to tighten borrowing costs in order to cool the economy. And for lower-income Americans, inflation is taking a harder toll and forcing many people to adjust their spending patterns. Walmart executives told analysts on a conference call on Tuesday that some customers were switching to cheaper store brands from national brands, particularly in lunch meats, as they juggled higher costs.More customers are buying half-gallon jugs of milk, instead of a full gallon, company executives said.

Still, the robust sales figures in the government's report are also impressive since retail sales covers only about one-third of consumer spending, with the rest going to services such as travel, haircuts, and health care. Airlines and hotels are also reporting strong sales as more people are taking trips after postponing travel for two years.

Several factors are enabling consumers to keep spending even as prices soar. Wages and salaries have been rising rapidly as businesses, struggling to fill a record-high number of open jobs, have been forced to offer more generous paychecks.Average hourly earnings, excluding managers, rose 6.4% in April from a year earlier, one of the fastest annual increases in four decades. While that is below the rate of inflation, in some industries workers' inflation-adjusted wages are rising.

Source: Entertainment Trends (entertainmenttrends.net)

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