Consumer spending was stronger than expected in March, as the Commerce Department reported on Wednesday.
Higher estimates of retail sales were better than Dow Jones’ estimates of 1.2%, higher than the 0.2% increase in February and a 1.4% increase in monthly. It was adjusted to suit seasonality but not prices, and the year-over-year rise was 4.6%, but the largest monthly increase since January 2023.
Excluding cars, the numbers were stronger than expected, with sales increasing by 0.5% compared to the 0.5% forecast. Economists were hoping that the car sales numbers would jump as buyers tried to preempt President Donald Trump’s aggressive tariffs.
Auto and parts dealers reported a surge in sales of 5.3%.
Reading points to spending strong expenditures despite the intersection of looming tariffs and expectations that the economy is weakening.
“We’re committed to providing a great opportunity to help you,” said Chris Rupkey, Chief Economist at FWDBonds. “Consumers expect prices to be significantly higher the following year, so they clean up store shelves and pick up bargains whenever possible.”
The market responded little to the release.
The retail report counters multiple recent sentimental measures that show Trump’s tariffs are widely fearing that it will sink the economy into recession and spike prices. Last week, we have carefully monitored the University of Michigan Consumer Sentiment Survey, which marks the second-lowest read to date, with expectations for inflation over the year at its highest since 1981.
Aside from the big moves in automotive sales, sports goods, hobbies and music stores rose 2.4%, while building materials and garden stores rose 3.3%. Foodservice and drinking places rose 1.8%, but the gasoline department reported a 2.5% decline as monthly prices fell.
Get tickets to Pro Live
Join the New York Stock Exchange!
An uncertain market? Earn Edge with CNBC Pro Live, the first exclusive event on the historic New York Stock Exchange.
Access to expert insights is paramount in today’s dynamic financial situation. As a CNBC Pro subscriber, we recommend attending the first exclusive and in-person CNBC Pro live event held at the iconic NYSE on Thursday, June 12th.
Join the interactive professional clinic led by professional Carter Worth, Dan Niles and Dan Ives, along with a special edition of a professional talk with Tom Lee. You will also get the opportunity to network with CNBC experts, talent and other pro subscribers during exciting cocktail hours on the legendary trading floor. Tickets are limited!
