United States: Retail sales dip by more than expected in March
Retail sales decreased 1.0% in month-on-month seasonally-adjusted terms in March, which was a deterioration from February’s 0.2% decrease and was notably weaker than market expectations of a 0.4% dip. The reading reflected a broad-based downturn across the major sectors, with motor vehicle and parts dealers, food and beverages, gasoline stations sales and general merchandise stores all contracting in March.
The expiration of a temporary boost to food stamp benefits, higher interest rates and a tough base effect following a surge in spending in January likely all weighed on March’s reading. That said, despite the disappointing March data consumer spending should still have expanded at a robust rate in Q1 as a whole.
On an annual basis, retail sales rose 2.9% in March, which was significantly below February’s 5.9% expansion and marking the worst result since June 2020. Accordingly, the trend pointed down, with the annual average growth of retail sales coming in at 7.5%, down from February’s 7.8%.