United States: Retail sales record quickest growth since May 2020 in March
April 15, 2021
Retail sales grew 9.8% in month-on-month seasonally-adjusted terms in March, which contrasted February's 2.7% decrease. The result marked the strongest increase since May 2020. The reading reflected a broad-based improvement, with sales at motor vehicle and parts dealers, food and beverages and general merchandise stores all rebounding vigorously in March.
On an annual basis, retail sales rose at a quicker rate of 27.7% in March (February: +6.7% yoy), the best result on record and partly due to a low base effect. That being said, retail sales in March were well above its pre-pandemic levels. Moreover, the trend improved notably, with the annual average growth of retail sales coming in at an over one-year high of plus 3.6% in March, up from February's 1.0% reading.
Commenting on March’s print, Katherine Judge, senior economist at CIBC Economics, noted:
“This data suggests a stronger Q1 GDP growth print than previously expected, although with some categories likely unwinding gains at the expense of services ahead, the strength in retail sales will lose some luster in terms of monthly growth rates. Still, this data is an indication of the dramatic acceleration in activity that the economy is poised for in the second quarter, as spending on services will more than offset drops in any retail sales goods categories.”
Author: Steven Burke, Economist