Shoppers pulled back on spending in April as higher gas prices fueled by the Iran war meant less money left over for some nonessentials like clothing and furniture, according to Commerce Department data released Thursday.

Retail sales rose 0.5% in April, a slowdown from the revised growth level of 1.6% in March, which had marked the largest one-month increase in retail spending in more than three years. The Iran war that began in late February has led to the shutdown of the Strait of Hormuz, cutting off one-fifth of the world's daily oil supply.

The average price for a gallon of regular gasoline rose to $4.53 on Thursday, according to motor club AAA — $1.35 more than it cost a year ago. Economists had believed that larger tax refunds would kick start spending at the start of the year, but soaring gas prices are taking a bigger slice out of American paychecks since the start of the war.

What the Left Is Saying

Progressive economists and Democratic lawmakers said the data underscores the vulnerability of working families to external economic shocks. Senator Elizabeth Warren of Massachusetts said in a statement that rising gas prices 'hit hardest on those who can least afford it,' calling for targeted relief for low-income households facing higher transportation costs at the pump.

Consumer advocacy groups aligned with progressive causes argued that the administration should consider releasing oil from the Strategic Petroleum Reserve or pursuing diplomatic channels to ease energy price pressures. The Center for American Progress released an analysis arguing that sustained high gas prices could 'derail the economic progress made by working families over the past year.'

Progressive lawmakers also pointed to rising inflation data as a concern, noting that producer prices jumped 1.4% in April and consumer prices rose 3.8% year-over-year — increases largely attributed to soaring energy costs. Representative Jim Himes of Connecticut said the administration should monitor whether these price pressures become 'embedded in the broader economy.'

What the Right Is Saying

Conservative economists and Republican officials emphasized that the economy is showing resilience despite significant headwinds. The April jobs report, which showed a surprisingly strong 115,000 new positions added last month, was cited as evidence that employers have so far defied economic shocks from the Iran conflict.

Senator Thom Tillis of North Carolina said in an interview that 'American businesses and workers are proving their strength' and warned against government intervention that could make inflation worse. The Heritage Foundation argued in a briefing paper that releasing strategic reserves would provide only temporary relief and 'undermine long-term energy security.'

Senate Republican Whip John Thune noted that retail sales excluding gas actually rose 0.3% in April, suggesting underlying consumer demand remains solid. Business groups including the U.S. Chamber of Commerce echoed this assessment, with a spokesperson saying 'the fundamentals of the American economy remain strong even as we navigate international instability.'

What the Numbers Show

Retail sales data from the Commerce Department shows mixed signals across sectors: department stores fell 3.2%, furniture and home furnishings slipped 2%, while online retailers posted a 1.1% increase and electronics and appliance stores gained 1.4%. Restaurants registered a 0.6% increase, the only services category tracked.

Gas prices have risen to $4.53 per gallon, up $1.35 from one year ago — an approximately 43% increase year-over-year. March retail sales were revised upward to show a 1.6% gain, the largest monthly increase in more than three years, largely driven by rapid gas price spikes.

Inflation metrics released this week showed significant pressure: the producer price index rose 1.4% in April, the biggest monthly gain in over four years, while the consumer price index jumped 3.8% from April 2025 — the largest year-over-year increase in more than three years. These figures are largely attributed to soaring energy prices and have begun showing up in plane tickets, baggage fees, soap, and toothpaste.

Despite these pressures, employers added 115,000 jobs in April, exceeding expectations. Excluding gas station sales, retail spending rose just 0.3% in April compared to a 0.7% pace in March.

The Bottom Line

The data suggests that higher gas prices driven by the Iran conflict are beginning to reshape consumer spending patterns, with shoppers reducing discretionary purchases while prioritizing essential expenditures. Economists will be watching for clearer signals about how persistent these price pressures become as major retailers including Walmart and Target release quarterly financial results next week.

The dual picture of strong job growth alongside rising inflation presents a complex economic landscape. Whether the April slowdown represents a temporary adjustment or the beginning of a sustained pullback in consumer spending will depend heavily on developments in the Iran conflict and whether energy prices stabilize or continue climbing.