ARLINGTON, Va.—Total retail sales increased 1.6% in March and the positive data indicate the economy will rebound in the second quarter, according to NAFCU Research Assistant Dhruv Singh.
"Overall, the first quarter saw choppy and mostly underwhelming data for consumer spending, which can be attributed to the government shutdown, lower tax refunds versus a year ago, harsh weather, and market volatility," said Singh in a NAFCU Macro Data Flash report. "But with a strong labor market and more accommodative Fed policy, growth is poised to rebound in the second quarter."
Year-over-year growth in retail sales was 3.6% in March, which was up from 2.2% in February. Core retail sales increased 3.6% from a year ago, and auto and gas sales grew 3.6%.
Improved Outlook
Results among the major retail segments were generally positive in March. The biggest gains came from gas stations (+3.5%), auto dealers (+3.1%), and clothiers (+2%). Hobby stores (-0.3%) saw the only decline during the month, Singh explained.
"The outlook on consumer spending improved in March. Monthly sales grew at the fastest pace in 18 months … Gas prices continue to rise, and sales at gas stations increased by 3.5% during the month. That did not prevent gains elsewhere, however, as most segments enjoyed healthy growth in March," Singh added.