Analyzing US Retail Sales: Slowing Consumer Demand or Recessionary Pressure at Bay? Top Economists Weigh In

Most economists are disappointed with April U.S. retail sales as consumer spending shows signs of weakness.

According to the advance estimates released today, retail sales increased 0.4% in April month-over-month, rebounding from a revised 0.7% decline recorded in March but falling short of the expected 0.8% increase.

Quincy Krosby, Chief Global Strategist of LPL Financial, thinks April U.S. retail sales were disappointing, suggesting cautious consumer spending with The Home Depot Inc HD reporting mixed Q1 2023 results. 

While Bill Adams, Chief Economist of Comerica Bank, agrees with Krosby's view, he believes core sales were stronger than expected last month, and revisions were modestly negative. 

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Adams sees consumer spending bottoming out this year on high-interest rates and the housing market downturn. He believes lower travels in April weighed on monthly gasoline sales volumes, as seen in the inconsistent services spending trend.

On the contrary, Chris Zaccarelli, Chief Investment Officer of Independent Advisor Alliance, believes that April U.S. retail sales came in strong, suggesting no sign of weaker consumer demand, and thinks recessionary pressure may be farther than currently being projected. 

Despite showing concern about risks related to regional banks issues, potential commercial real estate bust and debt ceiling standoff in the near term, Zaccarelli sees 2023 as a good year and cautions against 2024.

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