Retail sales rose 0.5% in March, driven primarily by gasoline sales, the Census Bureau reported Thursday.
That number was slightly lower than expected for a 0.6% increase and February’s 0.3% gain. Unlike other government economic data, retail sales numbers are reported without adjustment for inflation.
“Paying so much for gas, groceries and housing is disappointing, and consumer sentiment has been weak for quite some time,” said Ted Rossman, senior industry analyst at Bankrate. “Yet the actual data isn’t nearly as bad, whether we’re talking retail sales or the job market. It may not sound great, but most Americans are actually doing pretty well financially.”
Monthly consumer prices rose by the most in 16-1/2 years in March as Russia’s war against Ukraine hit the U.S. Driven the cost of gasoline to a record high. According to AAA, prices at the pump hit an average high of $4.33 per gallon in March. They have since backtracked to an average of $4.074 per gallon. Stocks were mostly lower on Wall Street. The dollar rose against a basket of currencies. US Treasury prices fell.
“Inflation should soften, if only because some of the biggest growth is behind us,” economist Joel Naroff wrote Tuesday after the consumer price index for March was released. “But there is a difference between a recession and a low. Since the monetary operates with a lag, don’t expect big progress on the inflation front, even if the Fed acts aggressively.”
Economists are watching consumer spending closely, as it accounts for about 70% of the country’s economic output. Inflation, now operating at a clip of 8.5%, is eating into consumers’ pocketbooks and the Federal Reserve’s move to hike interest rates is likely to dampen consumer enthusiasm.