April Retail Sales Rise Just 0.1% as March Revision Softens Disappointment

U.S. retail and food services sales edged up by just 0.1% in April 2025 to a seasonally adjusted $724.1 billion, according to the Census Bureau’s latest Advance Monthly Retail and Food Services report. While the monthly gain came in below expectations, a notable revision to March’s reading—from 1.5% to 1.7%—helped take the edge off the miss. On a year-over-year basis, retail sales grew 5.2%, reflecting still-resilient consumer demand. Sales for the February–April period were up 4.8% compared to the same stretch in 2024.

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Headline and Core Figures vs. Expectations

Economists had anticipated stronger growth for April, with consensus estimates calling for a 0.3% monthly gain in both headline retail sales and the core retail group excluding autos and gas. The actual headline figure of 0.1% thus marked a meaningful miss. Core retail sales (excluding autos and gas) fared slightly better, rising 0.2%, while the retail control group—which excludes food services, autos, building materials, and gas—was essentially flat, likely dragging slightly on real GDP estimates for Q2. Still, the March revisions provided a cushion, boosting overall sentiment about consumer strength.

Category-Level Performance: Modest Gains, Pockets of Weakness

Table 2 of the report revealed a mixed picture across subcategories. Motor vehicles and parts dealers—usually a major swing factor—posted a modest 0.1% decline after a 5.5% surge in March. Grocery store sales were flat, while clothing stores fell 0.4%. Department stores dropped sharply by 1.4%, and sporting goods and hobby shops tumbled 2.5%, suggesting continued softness in discretionary durable goods.

On the flip side, building material and garden equipment stores rose 0.8%, while electronics and appliance stores gained 0.3%. Nonstore retailers, a proxy for e-commerce, posted a slight 0.2% increase, reinforcing the slow but steady shift in consumer behavior toward digital channels. Food services and drinking places climbed 1.2%, capping another strong month for service-oriented spending.

Four-Month and Year-Over-Year Trends

The four-month percent change for 2025 versus 2024, found in Table 1, reinforces a trend of moderate growth. Total retail and food services sales are up 4.8% year to date, with gains led by motor vehicle and parts dealers (+6.8%), health and personal care stores (+8.6%), and nonstore retailers (+7.8%).

Gasoline station sales, on the other hand, have declined 3.9% YTD, a function of lower fuel prices or reduced demand. Department stores are down 1.9% for the year, confirming a longer-term downtrend in traditional retail. Restaurants and bars remain one of the strongest segments, up 5.9% YTD, as consumers continue to favor experiences over goods.

Macro Themes and Broader Context

The April data offers a nuanced read on the U.S. consumer. On one hand, real spending power appears intact, supported by a robust labor market and easing inflation. However, weak momentum in discretionary categories like apparel and home furnishings hints at increased selectivity among households. Core PPI for April was down 0.4% and retail control sales came in at 0.1%, suggesting some underlying softness in demand.

Notably, April’s headline growth came against the backdrop of an upwardly revised March, which could point to a front-loading of purchases. This “payback effect” may have left less fuel in the tank for April. It’s also worth noting that despite month-to-month volatility, the 5.2% annual growth rate remains above pre-pandemic norms.

Market and Federal Reserve Implications

Financial markets are likely to digest the April report as slightly dovish. Treasury yields edged lower following the release, as the combination of soft core sales and tame PPI reinforced the case for rate cuts in the second half of 2025. Fed officials have emphasized the importance of continued disinflation and signs of cooling demand—both of which are modestly reflected in this report.

Investors tracking consumer-exposed equities may see the data as a mixed bag. Companies in the building materials, restaurant, and e-commerce sectors continue to benefit from consumer resilience, while apparel and department store names may face margin pressure as volumes slow. With durable goods under pressure and household balance sheets still stretched by past inflation, retailers may need to lean further into promotions to drive foot traffic.

Conclusion

April's retail sales report painted a picture of restraint, but not retreating, consumer behavior. The headline miss disappointed, but a robust revision to March and solid year-over-year growth muted the downside. Discretionary categories continue to struggle, but strength in services and selected goods signals an economy still navigating toward equilibrium.

Looking ahead, retail sales figures will remain a crucial data point for policymakers, particularly as the Federal Reserve weighs the timing and magnitude of future rate cuts. For now, the consumer engine is still humming—just not at full throttle.