Tariffs Slow Retail Spending As Producer Prices Post Sharpest Drop Since 2020

U.S. retail sales barely grew in April, rising just 0.1% from March, as Trump’s newly imposed tariffs began curbing household consumption. The slowdown was most evident in auto sales, which dipped 0.1% after a March surge, and overall sales excluding gasoline and autos rose only 0.2%. The Producer Price Index fell 0.5% month over month, the biggest drop since April 2020, driven by lower service sector prices. On a year-over-year basis, producer inflation cooled to 2.4%, down from 3.1% in March and undercutting forecasts of 2.5%. The Bureau of Labor Statistics said April’s drop in overall producer prices was driven by a 0.7% decline in service prices. Over 40% of that decline came from reduced margins in machinery and vehicle wholesaling, with other drops seen in finance, software, travel, and hospitality services.