Timothy Gill, Vice President of Research and Chief Economist at the American Financial Services Association (AFSA), said that consumer spending growth nearly stalled in April, influenced by a significant decline in durable goods purchases linked to import tariffs.
"After surging in the previous month, consumer spending growth reverted nearly to stall speed in April," said Gill, Vice President, Research & Chief Economist. "Outlays on services moved forward at a steady pace but were offset by a sharp decrease in spending on goods."
According to the Bureau of Economic Analysis (BEA), real personal consumption expenditures rose by just 0.1% month-over-month in April 2025, marking a considerable slowdown from the 0.7% increase recorded in March. The deceleration was attributed to a 0.8% drop in durable goods spending, which had previously surged by 3.8% the previous month. In contrast, nondurable goods saw a slight rise of 0.1%, while services maintained steady growth at 0.3%. On a year-over-year basis, total real consumer spending increased by 3.2%, with durable goods leading the growth at 6.8%.
Durable goods orders in the U.S. experienced a significant downturn in April 2025, falling by 6.3% to $296.3 billion after four consecutive months of growth. This sharp decline reflects economic uncertainty surrounding the implementation of new tariffs, as reported by the U.S. Census Bureau, which indicated that transportation equipment led the decrease, down $20.3 billion or 17.1% to $98.8 billion.
The tariffs introduced in 2025 have resulted in an estimated short-run increase in consumer prices of 1.5%, equating to a loss of purchasing power of approximately $2,500 per household. These tariffs have raised the U.S.'s average effective tariff rate to 14.5%, the highest since 1938. The Budget Lab at Yale University notes that the price level from all 2025 tariffs rises by 2.3% in the short run, equivalent to an average per household consumer loss of $3,800.
Gill is Vice President of Research and Chief Economist at AFSA with over 25 years of experience in economic analysis across major trade associations and holds advanced degrees in economics from Miami University and John Carroll University.