April Retail Sales Show Small Increase
Stocks may hardly react at all to news that April retail sales did not change much compared to the previous month.
Quick overview
- U.S. retail sales saw a minimal increase of 0.1% in April, following a 1.5% rise in March, largely due to the impact of tariffs.
- Economists had anticipated flat sales figures, which did not significantly affect the stock market's performance.
- With a new trade agreement in place, there is optimism that May's retail sales may improve, potentially boosting the market.
- The Federal Reserve may consider adjusting its interest rate timeline, although Chairman Jerome Powell remains cautious about rate cuts until inflation decreases.
In April, U.S. retail sales increased by a microscopic 0.1% after climbing 1.5% in March. Retailers are disappointed by how much of an impact tariffs have had on their business.
With the new trade agreement, May retail sales numbers may look better, but in April, they were almost flat, increasing only incrementally. U.S. retail sales figures have been released for April, and they show stagnating growth that is mostly attributed to high tariffs.
This is in line with expectations, though, as economists predicted that sales would be unchanged from the previous month. However, this figure does not help the high stock market numbers, but it does not hurt them either.
Throughout the year, retail sales have slumped and surged as retailers try to figure out how to handle President Trump’s tariff changes. Investors should be thankful that April’s numbers were not much worse than they were.
Prepare for a Market Surge
There is more to be thankful for than the fact that the retail sales numbers did not dip, though. Since last month’s numbers were mostly flat, they could be very good for the next month, which could give the market a boost in a few weeks.
There is also talk that the Federal Reserve could move up its timeline of interest rate cuts now that the economy is doing better in the aftermath of the trade agreement between China and the United States. There is no compelling evidence that this will happen, but it is something that many analysts have been talking about as a possibility if the traffic problem ever settles down.
Fed Chairman Jerome Powell has been adamant that he will not recommend rate cuts until inflation comes down, going so far as to defy Trump’s wishes on the matter and put himself in jeopardy of losing his position.
For the next three months, some of the most severe tariffs have been put on pause. This should give the stock market time to grow, regaining what it lost and perhaps setting new record highs. Investors simply need to be prepared for some level of retreat or price correction to compensate for the stock market’s quick upswing.
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