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

• Mixed category performance: gasoline (+2.8%), sporting goods/electronics (+1.4%), and online sales (+1.1%) rose, while autos (-0.4%), furniture (-2%), and clothing (-1.5%) declined
• Import prices jumped 1.9% monthly with industrial supplies surging 6.7% amid higher shipping costs; jobless claims rose to 211,000 from 199,000 in a 'low hire, low fire economy' with weak wage growth
• ING expects energy prices to remain elevated through 2026 due to global inventory rebuilding and Middle East supply risks, threatening consumer spending resilience in the second half

Summary

Key Figures:

US retail sales rose 0.5% in April 2026, driven primarily by a 2.8% surge in gasoline station receipts. However, the growth masks underlying weakness, with auto sales declining 0.4%, furniture dropping 2%, and clothing falling 1.5%. Positive performers included sporting goods and electronics (both up 1.4%) and online retailers (up 1.1%).

Economic Context:

ING Economics' Chief International Economist James Knightley emphasized that these figures are nominal, reflecting higher prices rather than genuine volume growth. Import prices jumped 1.9% monthly, with industrial supplies surging 6.7% due to elevated shipping costs. Initial jobless claims rose to 211,000 from 199,000, while continuing claims reached 1.78 million, indicating labor market strain.

Market Implications:

Despite consumer confidence at reported all-time lows, households continue absorbing cost pressures. However, ING warns this resilience may prove temporary. With muted wage growth and persistent energy cost pressures, analysts anticipate softer retail and consumer spending in H2 2026. The current environment is characterized as a "low hire, low fire economy" with steady employment but weak wage growth.

Outlook:

Even if geopolitical tensions ease, energy prices are expected to remain elevated throughout 2026 due to inventory rebuilding in Europe and Asia, damaged infrastructure, and supply-side constraints. Consumer spending, which drives 70% of US economic activity, faces mounting pressure as inflation erodes purchasing power without corresponding wage increases.

Investment Angle:

The mixed data suggests a defensive pivot toward consumer staples may be warranted, while discretionary retail exposure faces downside risk through year-end.