Recent data by the US Department of Commerce showed retail sales rising 0.7% month over month, and 4% since last year. The 0.7% figure exceeded the 0.3% forecast by Wall Street economists. The largest area of growth during the month came from online sales, which were up 2.7% since February and 11.3% since March of 2023. Sales at “miscellaneous retailers” rose 2.1%, while an increase in fuel prices brought sales at gas stations up 2.1%.
A number of categories saw sales decline during the month: sporting goods, hobbies, musical instruments and books fell by 1.8%, clothing stores were down 1.6%, and electronics and appliances dropped 1.2%. The report follows last week’s release of the monthly Consumer Price Index (CPI), which accelerated 0.4%, overall, in March, and 3.5% on an annual pace, faster than expected.
The CPI also showed an increase in food consumed away from home (i.e., restaurant sales), which is 4.2% more expensive than this time last year, far exceeding food consumed at home (that is, groceries), which showed an annual inflationary pace of 1.2%. Meanwhile, recent earnings reports by two of the biggest banks in the US noted an uptick in consumer spending. At Citi, CEO Jane Fraser reported that “healthy spend growth persists in branded cards, primarily driven by our more affluent customers. Across both portfolios, increased demand for credit continues to drive strong growth in interest earning balances.” And “while they’re only a small part of our portfolio, we are keeping an eye on the customers in the lower FICO band,” she added.
“We continue to see strength in the US economy,” Wells Fargo CEO Charlie Scharf said during the bank’s earnings call. “Spending patterns and consumers using our debit and credit cards remain generally consistent and continue to grow year over year.”
