U.S. retail sales growth slows in March

Consumers are still spending but at a slower rate than last month and a year ago, according to U.S. Census Bureau data released Thursday (April 14). Seasonally adjusted retail sales in March were $665.7 billion, up 0.5% from February and up 6.9% from a year ago.

Despite a slower rate of growth, economists remain pleased with the forward growth as inflation continues.

The National Retail Federation (NRF) breaks out automobile, restaurant and fuel sales in its monthly data to compute a core retail sales number which was flat with last month and up 4% from March 2021. In February, core sales were down 0.7% month over month but up 13.2% year over year.

“March retail sales show that consumers have maintained their ability to spend in the face of record-level inflation, supply chain issues and geopolitical unrest,” NRF CEO Matthew Shay said. “Consumers are adapting and shopping smarter for themselves and their families. We believe the strength of the consumer can carry the economy through this considerable economic uncertainty if policymakers implement measured policies and do not overreact to current conditions.”

The trade group also reports a three-month average as of March showing sales are up 8.6% compared with the same period last year. NRF said the growth is consistent with their forecast of  6% to 8% this year.

“While prices soared in March and eroded spending power, shoppers remained resilient and sales were healthy,” NRF Chief Economist Jack Kleinhenz said. “Consumers have the willingness to spend and their ability to do so has been supported by rapid hiring, increased wages, larger-than-usual tax refunds and the use of credit. They are largely dealing with the shock of gas prices but will be facing higher interest rates as the Federal Reserve tightens monetary policy in the coming months. The challenge for the Fed is to cool off demand without pushing the economy into a dramatic slowdown.”

March sales were up in all but two categories on a monthly and yearly basis, with year-over-year gains led by grocery, clothing and furniture stores. Online sales were down 6.4% from the prior month and up 0.9% from a year ago. Health and personal care stores saw sales slide 0.3% from last month, but they were also up 0.9% from a year ago.

Electronics and appliance sales were up 3.3% from the prior month, but they fell 9.6% from a year ago. Sporting goods sales also fell 5.7% from a year ago, but rose 3.3% from last month’s report. Grocery and beverage store sales were up 1% month-over-month, rising 7.9% year-over-year. As consumers looked to spruce up their spring and summer wardrobes apparel stores saw monthly sales increase 2.6% from February and 7.5% from a year ago.

General merchandise stores saw sales rise 5.4% from the prior month and they were up 3.9% from a year ago. Home furnishing stores posted 0.7% more sales from last month’s report and 4.2% more than a year ago. Building materials and garden supply stores were up 0.5% month-over-month and up 1.8% from a year ago.