NEW YORK -- Consumers reined in their purchases last month as gasoline prices climbed higher due to the ongoing Iran war, reducing disposable income available for nonessential goods such as clothing and furniture.

According to Thursday's Commerce Department figures, retail sales increased by 0.5% in April, marking a deceleration from the revised 1.6% gain recorded in March. That prior month saw the strongest single-month retail spending surge in over three years, propelled mainly by a sharp rise in gas prices.

When gas station sales are excluded, April's retail sales advanced 0.3%, down from the 0.7% growth - stripped of fuel sales - in March.

Spending remained subdued in several sectors.

Department store sales dropped 3.2%, and furniture plus home furnishings outlets declined 2%. Building materials and garden supply stores eked out a slight 0.1% rise. In contrast, online sales climbed 1.1%, while electronics and appliance retailers enjoyed a 1.4% uptick.

This data provides just a glimpse into consumer behavior, omitting categories like travel and lodging. The only service sector tracked - restaurants - notched a 0.6% improvement.

The Iran war, which erupted in late February, has closed the Strait of Hormuz and disrupted one-fifth of global daily oil production. Regular gasoline averaged $4.53 per gallon overnight Thursday, up $1.35 from a year earlier, per AAA data.

Analysts had anticipated that hefty tax refunds would spur early-year spending. However, skyrocketing fuel costs since the war's onset have eroded household budgets more sharply, curtailing outlays on dining, apparel, and other luxuries.

Nevertheless, U.S. job growth has held firm against the war's economic fallout, with employers adding a robust 115,000 positions last month.

Inflation signals have mounted this week. The Labor Department noted Wednesday that the producer price index - a precursor to consumer inflation - surged 1.4% in April, the largest monthly jump in over four years. The prior day, the consumer price index leaped 3.8% year-over-year from April 2025, the steepest annual rise in more than three years. These escalations, rooted in energy costs, are infiltrating prices for airfares, fees, soap, and toothpaste alike.

Insights into inflation's household effects could sharpen next week as key retailers including Walmart and Target unveil their quarterly earnings.