April retail sales data showed that the round of tariffs announced by President Donald Trump on “Liberation Day” started to produce their effects by reducing household consumption.
However, while households reined in spending, inflationary pressures at the producer level unexpectedly contracted in April, notching the biggest decline since April 2020 and highlighting the disinflationary impact of tariffs on input costs across industries.
U.S. retail sales grew only by 0.1% in April from the previous month, a report from the Census Bureau showed Thursday. The outcome marks a sharp reversal from March’s upwardly revised 1.7% gain, yet slightly topped economist expectations of no change.
A relevant drag came from motor vehicles and parts which contracted by 0.1%. In March, auto-related sales jumped 5.5% as consumers rushed to buy before tariffs took effect.
Stripping out autos, retail sales also …