Retail sales rise 0.9% in April as U.S. consumers show resilience

— 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 increase was driven by greater sales of cars, elec- tronics, and at restaurants, the Commerce Department said Tuesday.

Even adjusting for infla- tion, which was 0.3% on a monthly basis in April, sales increased. Gas prices fell slightly last month, restrain- ing inflation, after soaring in March in the aftermath of Russia’s invasion of Ukraine.

Consumers are providing critical support to the econ- omy even after a year of see- ing prices spiral higher for gas, food, rent, and other necessi- ties. The economy contracted in the first three months of the year, but consumer and busi- ness spending still increased at a healthy pace.

“Never bet against the U.S. consumer has always been a good adage,” said Paul Ashworth, chief U.S. economist at Capital Economics in a note to clients. “Despite the surge in prices weighing on their purchasing power, the U.S. consumer now appears to be single-handedly keeping the global economy afloat.”

The Tuesday report also showed sales in March were revised higher, to a gain of 1.4%, from 0.7%. As a result, spending even rose that month after adjusting for inflation, which surged to 1.2% as gas prices rose. The revision suggests the economy shrank by less than the 1.4% contraction that was reported lastmonth.

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.