Retail sales were up by 1.4 percent in March, helped by motor vehicle sales but held back by sales at gasoline stations (on lower gasoline prices). There were upward revisions to February, but the retail sales control group (removing autos, building supplies, and gasoline stations) was up by only 0.4 percent (a bit less than expected).
While there may have been some buying-ahead behavior (especially autos), the retail sales figures were solid and indicated that the consumer continued to enjoy the great American sport of shopping. This continues to be supported by still strong job and income growth, with the weekly unemployment claims not yet showing any meaningful weakness.
This report – other than for buying ahead – would not have had major tariff impacts, but that will likely change as soon as April. But because retail sales are reported in nominal terms, higher prices can offset (at least some of) a slowdown in real spending activity.
At least through March, the underlying U.S. economy (C + I) continued to move ahead at an above-trend pace.
David W. Berson, Ph.D., CBE
Chief Economist
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