Retail sales jumped 0.7% in March, much higher than expected

[Pelican Press 0]

Retail sales jumped 0.7% in March, much higher than expected

People carry Macy’s shopping bags in front of the Macy’s Herald Square store on March 02, 2023 in New York City.

Michael M. Santiago | Getty Images

Rising inflation in March didn’t deter consumers, who continued shopping at a more rapid pace than anticipated, the Commerce Department reported Monday.

Retail sales increased 0.7% for the month, considerably faster than the Dow Jones consensus forecast for a 0.3% increase, according to

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that is adjusted for seasonality but not for inflation.

The consumer price index increased 0.4% in March, the Labor Department reported last week in data that also was higher than the Wall Street

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. That means consumers more than kept up with the pace of inflation, which ran at a 3.5% annual rate for the month, below the 4% retail sales increase.

Excluding auto-related receipts, retail sales jumped 1.1%, also well ahead of the estimate for a 0.5% increase.

An increase in gas prices helped push the headline retail sales number higher, with sales up 2.1% on the month at service stations. However, the biggest growth area for the month was online sales, up 2.7%, while miscellaneous retailers saw an increase of 2.1%.

Stock market futures added to gains following the report, while Treasury yields also pushed sharply higher. The upbeat

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for the Wall Street open came despite an escalation over the weekend in Middle East tensions as Iran launched aerial strikes at *******.

Resilient consumer spending has helped keep the economy afloat despite higher interest rates and concerns over stubborn inflation. Consumer spending accounts for nearly 70% of U.S. economic output so it is critical to continued growth in ****** domestic product.

Monday’s data comes with market concerns elevated over the path of monetary policy. Federal Reserve officials have expressed caution about cutting interest rates while inflation pressures continue, and investors have been forced to reduce their expectation for easing in policy this year.

Multiple categories did report declines in sales for the month: Sporting goods, hobbies, musical instruments and books reported a 1.8% decrease, while clothing stores were off 1.6% and electronics and appliances saw a 1.2% decrease.

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