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May 14, 2021

Feds: Retail spending flat as stimulus effect fades

Photo | CNN
By Zachary Vasile

U.S. retail sales were flat in April, according to data released Friday by the Department of Commerce, a sign that the supercharging effect of recent stimulus checks and other federal aid is likely wearing off.

Consumers pared back spending on items such as clothing, furniture and electronics but redirected much of the difference toward restaurants and motor vehicle parts and services.

The April figures stand in sharp contrast to March, when retail spending surged by 10% to a record $619 billion. Most industry observers had expected some level of moderation, with economists polled by Reuters predicting a climb of around only 1% for April before the official statistics were made public.

Even with last month’s stall, consumer spending remains at its highest-ever level, and federal officials have said they are optimistic that economic indicators will keep moving in the right direction as states gradually reopen after more than a year of COVID-19-related restrictions. Separate data from the Federal Reserve System indicates that many Americans have more money saved now than at any point in recent history, which could set the stage for increased buying over the late spring and summer.

Connecticut plans to drop all restrictions on May 19. On Thursday, Gov. Ned Lamont announced that vaccinated residents will not have to wear masks while indoors.

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