Retail sales increased 1.4% in March, significantly outpacing February’s modest 0.2% gain and marking the largest monthly rise in over two years. The growth was widespread, with 11 out of 13 retail categories showing improvement. A substantial 5.3% jump in automobile purchases led the way, likely driven by consumers rushing to buy vehicles before new auto tariffs take effect.
The “control group” (which excludes volatile categories like autos, gasoline, building materials, and food services) posted a more modest 0.4% increase, falling short of expectations. This figure is particularly important as it feeds directly into GDP calculations for the first quarter.
What’s the bottom line?
As a critical indicator of consumer spending, retail sales directly impact overall economic health. WhileMarch numbers exceeded forecasts, the surge may represent purchases pulled forward to avoid tariffs, potentially weakeningfuture reports. Fed officials will be watching upcoming retail sales data closely, as consumer spending strength will alsoinfluence their decisions on interest rates and monetary policy.