Preheat oven to 350 degrees. Spray a 9 x 13 baking dish with non-stick cooking spray. Set aside.
In a medium mixing bowl, whisk together flour, baking powder, baking soda, salt, cinnamon, nutmeg, and cloves. Set aside.
In a large mixing bowl using an electric hand mixer, beat butter and both sugars together until combined about 2 minutes.
Beat in eggs one at a time until combined. Beat in vanilla until combined.
Slowly add in 1/3 of the dry ingredients into the wet ingredients and beat to combine. Add in 1/2 of the milk and combine. Add 1/3 of dry ingredients, beat, the rest of the milk, then finish with the rest of the dry ingredients.
Add in apple sauce and combine using low speed on hand mixer.
Fold in walnuts. Pour batter into prepared baking dish.
Bake in preheated oven for 30-35 minutes until cake is golden, pulls away from the sides and a toothpick inserted into middle of cake comes out clean.
Cool completely. Dust top of cake with powdered sugar.