US retail sales came back down to Earth in April after stimulus checks sent Americans on a shopping spree in March.
Month-over-month, retail sales were flat in April, the Census Bureau reported Friday. Stripping out car and auto parts, sales actually declined slightly, by 0.8%. The massive March advance that came on the back of a new round of stimulus checks from the American Rescue Plan was revised up to 10.7%, from 9.7% reported initially.
Even though April sales were weaker than economists expected, total sales over the past three months are still up a whopping 27% compared with the same period a year ago.
The consumer spending boom of the past few months is a good sign for America’s recovery because some two-thirds of the economy is driven by people spending money.
The big question is whether the spending pace can hold up as the pandemic-era spending boosters wind down.
The stimulus checks were a one-off, even though there were multiple iterations. The enhanced unemployment benefits that Congress instituted when millions of jobs vanished last spring are only set to expire in September, but various states, including including Montana, South Carolina, Arkansas, Alabama, Mississippi and North Dakota, are working on terminating the expanded aid over the summer.
This is a developing story. It will be updated