Retail sales flat in April, falling short of Wall Street's expectations

In April, U.S. retail sales were unexpectedly flat, missing Wall Street's forecast of a 0.4% increase and marking a slowdown from March's 0.6% rise. This stagnation raises concerns about consumer spending amid persistent inflation and rising interest rates. Excluding autos and gas, sales actually declined by 0.1%, with notable drops in nonstore retailers and sporting goods, although clothing and gasoline sales saw increases.

Economic data also showed a cooling in the Consumer Price Index (CPI) for April, which could influence the Federal Reserve's interest rate decisions. The combination of weak retail sales and moderated CPI growth supports the possibility of a rate cut by the Fed in September, as the economy shows signs of slowing down. This includes softer job growth and manufacturing contraction, suggesting a gradual economic slowdown while maintaining enough resilience to guide future Fed actions on inflation.