Apr 15, 2024 - Economy

March retail sales data show the American consumer is still pretty strong

shoppers seen in herald square nyc

Photo: Yuki Iwamura/Bloomberg via Getty Images

For the latest sign of U.S. economic resiliency, look no further than Monday's retail sales report.

Driving the news: Retail sales rose 0.7% in March, while the previous months' figures were even better than originally thought, the government said.

  • In February, for instance, retail sales rose 0.9% — 0.3 percentage points more than first estimated.

Why it matters: The consumer appeared to be pulling back at the start of 2024, raising concerns about the health of household balance sheets.

  • But that weakness now looks like a head fake. Monday's data is strong evidence that the consumer is still hanging on, a huge vote of confidence for the health of the overall economy.

What they're saying: "The ebullient gains in employment and sturdy wage growth provides consumers the income wherewithal to keep spending at a rapid pace," Kathy Bostjancic, chief economist at Nationwide, wrote in a note.

Zoom in: The data, which is not adjusted for inflation, showed stronger sales at online retailers, gasoline stations, building suppliers, and food and beverage shops. That offset a drop in sales at electronics stores, auto shops and clothing retailers.

  • The so-called control group — which excludes volatile categories like gas, autos, and building materials and feeds into the calculation of consumer spending in GDP — rose 1.1% in March.
  • That follows a 0.3% increase in February and a slightly negative reading (-0.1%) in January.

The bottom line: "We do not think the robustness of the March data can be explained away," economists at Bank of America wrote this morning.

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