The April retail sales report will offer new insight into whether consumers are still powering the economy or beginning to pull back. The data arrives following a month of ups and downs because of the Trump Administration’s policies and will help clarify how much households are spending as they navigate high prices and lingering financial uncertainty. Economists surveyed by Bloomberg expect a modest 0.03% increase in retail sales for April, a steep drop from last month.
Here are five things to watch when the U.S. Census Bureau releases the numbers this week.
1. April will test the strength of the early-year rebound
Retail sales fell sharply by 1.2% in January amid freezing weather and a post-holiday reset, but consumers returned in February with a 0.2% gain and a more robust increase of 1.4% in March, helping to restore momentum. April’s report will show whether that rebound is continuing or starting to cool again. If growth softens across categories like electronics, clothing, or nonstore retail like Amazon, areas that tend to reflect discretionary spending and consumer confidence, it could indicate that the winter recovery was short-lived. On the other hand, steady gains would reinforce the view that consumer demand remains resilient despite tariff confusion heading into the summer.
2. Demand may cool as consoles and components become more expensive
Microsoft recently hiked the price of its Xbox Series S and X consoles by $100, while Nvidia recently announced increases of up to 15% on some graphic cards and chips tied to gaming and AI. Nintendo has also raised prices on accessories such as the controllers for its highly anticipated Switch 2 and has left the door open for broader adjustments depending on “market conditions.” If April’s retail sales show softness in electronics stores, it may reflect pushback from consumers facing fewer discounts and more premium pricing.
3. Watch for signs that inflation is inflating the numbers
Retail sales are reported in nominal dollars, which means they aren’t adjusted for inflation. When prices rise, higher sales totals don’t necessarily mean people are buying more goods; they are just paying more. Categories like groceries and gas, where prices have been especially volatile, can distort topline figures. For example, food prices have increased by 23.6% from 2020 to 2024, according to a report from the Economic Research Service. A closer look at volume trends in discretionary categories will be key to understanding the real strength of consumer demand.
4. Trade crackdown is set to test low-cost e-commerce
The U.S. has officially ended the de minimis exemption for imports from China and Hong Kong, a policy that had allowed shipments under $800 to enter duty-free with minimal customs checks. The exemption expired on May 2 and presents a significant challenge for small merchants who sell on platforms like Shein, Temu, and TikTok Shop and depend on low-cost, direct-from-China shipping to keep prices competitive.
International trade economist Dr. Simon Schropp said the exemption helped small retailers avoid the kinds of import costs and paperwork that often put formal trade out of reach.
“We’re talking about very small retailers here who, you know, oftentimes struggle to survive as is,” Schropp said. “But now you throw in a whole new wrench… not only the cost of paying a tariff, which is going to be substantial but also the administrative costs involved.”
While a 90-day tariff truce has reduced the new duties on small parcels from 120% down to 54%, the exemption itself remains revoked. The overall tariffs between America and China have been cut to 30% and 10%, respectively. Small sellers now face higher costs, slower fulfillment, and customs complexity that could squeeze the entire low-price e-commerce model and reshape what shows up in the retail sales data in the months ahead.
5. Labor market strength may prop up retail
The labor market remains one of the strongest supports for consumer spending. Job growth has increased in recent months, while the unemployment rate has been steady, defying expectations. In April, the average hourly earnings rose by 0.2%, which more than likely helped many households offset inflation and maintain spending, especially on everyday goods and even dining out. Whether those gains are enough to sustain consumer spending through the spring remains a key question.
The April retail sales report will test whether the U.S. consumer still has gas in the tank or is finally hitting the brakes. But with global trade winds shifting and inflation still lurking, even a strong number may not guarantee smooth roads ahead.