The American consumer just won’t stop spending
Walmart warns tariff-linked price hikes are on the way
Census Bureau data released Thursday showed retail sales rose 0.5 percent in April and were up by the same amount once automobiles and fuel were stripped out, The New York Times reported.
It was the third consecutive monthly gain, Bloomberg said, following a revised 1.6 percent jump in March. The Bloomberg report noted the figures are not adjusted for inflation, so part of the increase reflects higher prices rather than larger basket sizes.
The Times found stubborn strength in discretionary spending. “Sales advanced in discretionary segments, such as electronics, which counters the narrative of consumers cutting back,” it noted. Thomas Simons, an economist at Jefferies, told The Times the picture is one of “a fairly bulletproof consumer overall” — Americans, he added, are “generally … not changing their behavior much” in response to the war in Iran.
The Wall Street Journal’s read was more cautious: it described retailers’ growth as having “cooled last month,” pointing to the slower rise in gasoline prices as the main reason for the moderation.
The “bulletproof” customer is not universally distributed. The Times observed that “consumer spending has been largely driven by affluent households for years,” and that even as outlays rise, paychecks “are struggling to keep pace with rising inflation” and “public sentiment among consumers is notably poor.”
Walmart says price hikes start by month’s end as appeals court saves Trump’s tariffs
The biggest American retailer used its earnings call to do something most chains have spent the spring trying to avoid: tell shoppers the bill is coming. Walmart Chief Financial Officer John David Rainey said customers should expect price increases by the end of May, with “more significant” hikes likely in June, Reuters reported, as the company tries to absorb tariff costs on container imports from China.
Same-store sales rose 4.5 percent in the quarter, and adjusted earnings of 61 cents per share beat the 58-cent analyst consensus, but the company withheld second-quarter profit guidance. Chief Executive Doug McMillon said the chain would try to keep tariff costs from rolling onto food prices.
Walmart is not alone. Walmart said general-merchandise inflation in its stores ran above 3 percent in the most recent quarter, up from 1.7 percent in the summer, CBS News reported, and Columbia Sportswear had told analysts earlier this spring it would push spring and fall prices up by a “high single-digit percent.” Walmart’s CFO blamed the climb on tariffs: “tariff-related costs lifted prices across many categories,” he told analysts, as quoted by CBS News.
The retailer’s warning lands the same week the U.S. Court of Appeals for the Federal Circuit gave the administration room to keep collecting the 10 percent global tariff that a lower court had struck down.
The appellate court issued an administrative stay on Tuesday in the case brought by two importers and a coalition of 24 states, The Wall Street Journal reported, allowing the levies to remain in force while the appeal moves forward. Bloomberg confirmed that the pause keeps officials collecting the tariffs during the litigation. The administration asked the court for a decision by Friday.
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This summary, based on AI research, originally appeared on ConsumerNews.ai.