Retail Sales Slow in April as Tariff Moves Unsettle Consumers

Retail sales and nonfarm employment moderated in April amid uncertainty surrounding trade policy, which contributed to cautious consumer behavior and market volatility. With many April 2 “Liberation Day” tariffs suspended the following week and the most punitive China-related duties paused for three months beginning May 12, headwinds to retail activity have eased somewhat but could pick up again as negotiations continue. Treasury Secretary Scott Bessent recently warned that punitive tariffs could return if trade negotiations stall before the respective 90-day tariff suspensions end. Further, while it may take several months for tariff costs to be fully passed on to consumers, Walmart made clear in its quarterly earnings release that it will raise prices to reflect tariff-related costs. These and similar price increases across other sectors of the economy could weigh negatively on already sour consumer sentiment and retail activity.

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