The American consumer is picking up the economy again

A bump up in demand for new cars also helped results, according to the Commerce Department report issued Tuesday.

Retail sales increased 0.4% in April from March when it was down 0.7%. It marked the first increase since January when unusually warm weather and a big jump in Social Security benefits likely spurred more spending.

Sales at car and auto parts dealers rose 0.4%, while business at gas stations fell 0.8%. Excluding car dealers and gas stations, retail sales rose 0.6%.

Spending increased 1.2% at online retailers and ticked up 0.6% at restaurants and bars. Department stores, electronic stores and home furnishings stores all saw declines. The figures are not adjusted for inflation unlike many other government reports.

Spending by Americans has remained resilient with signs of weakness elsewhere in the economy. A solid job market has helped to prop up spending. But there’s still been a broader pullback in spending as inflation still remains high despite some easing, and rising interest rates are taking a toll.

Consumer prices in the United States rose again in April, and measures of underlying inflation remained high, implying that the retreat from sharply higher prices is likely to be slow and bumpy. Prices increased 0.4% from March to April, the government said last week, up sharply from a 0.1% rise from February to March. Compared with a year earlier, prices rose 4.9%, down slightly from March’s year-over-year increase. It was the smallest annual gain in two years.

And earlier on Tuesday Home Depot, after years of explosive growth during the pandemic, said that sales slowed during the first quarter of 2023 and the nation’s largest home improvement retailer cut its profit and sales expectations for the entire year. Sales at stores open at least a year, a key indicator of a retailer’s health, dropped 4.5%, and it was down 4.6% for stores in the U.S.

The numbers from Home Depot were a rough beginning to a busy week of retail earnings, dragging down the entire sector and the Dow as well.

Walmart, Target and Macy’s will all report quarterly earnings this week and next and all edged lower in trading before the opening bell. Rival Lowe’s slid almost 3%.

Economists will be parsing retail numbers to look for the impact of volatility in the banking sector and how tightening credit is changing behavior.

The retail report covers only about a third of overall consumer spending and doesn’t include services such as hotel stays and plane tickets, which have rebounded as the threat of COVID-19 eases.

The Commerce Department recently revised its retail-sales data based on the results of annual surveys of retail and services industries.

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AP Economics Writer Chris Rugaber in Washington contributed to this report.