Consumer Spending Remains Strong in April Despite Economic Concerns: CNBC/NRF Retail Monitor

Strong Consumer Spending in April

• 📈 The CNBC/NRF Retail Monitor indicates a second consecutive month of strong consumer sales in April.
• 💡 This spending occurs despite separate data showing downbeat views on the economy.
• 📊 The headline number, excluding autos and gas, rose 0.7% month-over-month, with the core number (excluding restaurants) up 0.9%.
• 🚀 Year-over-year, the headline figure increased by a robust 6.8%, and the core by 7.1%.

Factors Influencing Spending

• ⚠️ Some of the gains may be attributed to tariff front-running and a calendar shift of Easter into April.
• 🛒 Consumers are spending ahead of potential price increases and supply chain dislocations.
• 🛍️ Notable sector gains include electronics and appliances (+2.8%), building and garden supplies (+28%), health and personal care (+1.4%), clothing (+1.1%), and furniture/home (+0.9%).
• 🍽️ Restaurants and bars were among the few sectors showing a slight decline.

Consumer Financial Health and Fed Perspective

• ✅ The data suggests consumers have the wherewithal to spend, maintaining their ability to do so despite tariff uncertainty.
• 🏦 Fed Chair Powell also noted strong consumer spending based on credit card data, similar to the CNBC/NRF Retail Monitor.
• 📉 While unemployment is low and incomes are rising above inflation, consumer sentiment is down.

Data Interpretation and Caution

• 🧩 There may be a give-back from front-running on imports, potentially impacting the second quarter.
• 🧐 A retraction in consumer spending is possible if consumers were indeed buying ahead of time.
• ⚠️ The Fed remains cautious due to significant noise in the data, making projections difficult.