US retail sales show resilience despite cost pressures, ING warns of risks

US retail sales rose 0.5% in April, underscoring resilience in household spending despite higher gasoline prices and weak consumer confidence. 

ING Economics said the figures highlight the ability of consumers to absorb cost pressures, though risks remain as energy prices stay elevated and wage growth lags.  

While inflation data dominated the early part of the week, on Thursday, the focus shifts to retail sales.

This is significant because consumer spending drives approximately 70% of all economic activity in the US, and retail sales themselves contribute over 40% of that consumer spending.

Retail sales defy headwinds  

The April report showed headline sales climbing in line with expectations.

Gasoline station receipts jumped 2.8% as fuel costs rose, while sporting goods and electronics both gained 1.4%.

Online retailers also expanded, with non-store sales up 1.1%.  

Not all categories were positive.

Auto sales slipped 0.4%, furniture fell 2%, and clothing dropped 1.5%.

ING stressed that these are nominal figures, meaning much of the growth reflects higher prices rather than stronger volumes.  

“It is a mixed outcome, but so far there is little sign that higher fuel costs are forcing consumers to cut back spending on other things, despite consumer confidence supposedly being at all-time lows. Nonetheless, we expect that pressure to build,” said James Knightley, Chief International Economist at ING Economics. 

Inflation pressures mount  

The release came alongside import price data showing a 1.9% monthly jump, led by energy.

Even non-petroleum imports rose 0.7%, while industrial supplies surged 6.7% amid higher shipping costs.  

Knightley noted that these are nominal figures, so higher prices are driving much of the growth rather than stronger volumes. 

“In an environment of weak jobs and wage growth, high energy costs will continue to eat away at spending power and this runs the risk of softer retail and consumer spending growth numbers in the second half of the year.”

Labor market data reinforced the picture of strain.

Initial jobless claims rose to 211,000 from 199,000 the prior week, slightly above consensus.

Continuing claims edged higher to 1.78 million. Knightley described the US as a “low hire, low fire economy,” where employment remains steady, but wage growth is muted.

“While not a terrible situation to be in, this isn’t helpful for a rebound in consumer sentiment and spending,” he added. 

Risks ahead  

ING warned that even if geopolitical tensions ease, energy prices are unlikely to fall significantly in 2026. 

Inventory rebuilding in Europe and Asia will sustain demand, while supply-side risks—including damaged infrastructure and tanker owners’ reluctance to return to the Middle East—could keep costs elevated.  

For now, April’s retail sales highlight the ability of US households to absorb higher costs without sharply reducing discretionary purchases.

But ING analysts warn the resilience may fade as inflationary pressures persist.