The US Census Bureau released a report on Thursday indicating that March retail sales rose by 1.6% vs 1% expected, and following a -0.2% dip the month prior.
Key Takeaways
- Retail sales were 0.6% higher than expected in March with growth of 1.6%.
- The 1.6% boost in retail and food services sales amounts to $514.1 billion.
- The figure is 3.6% higher than the retail sales seen in March 2018.
Sales for Q1 2019 were up 2.9% from the previous quarter after very weak performance in December 2018 brought down Q4 performance with a 1.2% decline, the lowest in 9 years.
The most recent pace of sales is now showing the fastest growth since 2017 in the persistently volatile retail sector. The majority of the last 12 months have seen wild fluctuations, frequently straying to and from negative territory. It could be that the healthy job market has empowered consumers to spend more following the decline in the sector since December.
In March, spending on autos, gasoline, clothing, and furniture increased. Sales in gas stations rose 3.5%, car dealers sold 3.1% vehicles, clothing jumped 2%, and furniture saw a 1.7% increase. Excluding the volatile components of gas and automobiles, sales were still up 0.9% from February. Retail spending has grown 3.6% overall over the past year. As consumer spending comprises the bulk of the economy, retail sales are among the key indicators used to gauge economic health and growth.
US #retail sales post very strong +1.6% March:
- #gasoline sales +3.5% (expected: +6.5% CPI gasoline)
- #autos +3.1% (expected: light veh sales 17.5ml)BUT strong sales all around:
- Core +1.0%
- furniture +1.7%
- clothing 2.0%
- online+1.2%
- #restaurants & bars +0.8%(1/n) pic.twitter.com/Wo9nfiK2ug
— Gregory Daco (@GregDaco) April 18, 2019
Expert Outlook
CIBC Capital Markets economist Katherine Judge stated that the strong performance constituted balanced growth in consumer spending, but stated that the growth was not necessarily sustainable and that spending is expected to slow over the course of the year.
“The annualized three month average of core sales at a decent 2.6%, helped by March's rise in sales, which is indicative of a healthy rebound in consumption. While we still expect real consumer spending to decelerate over the remainder of the year, rising wages and a strong labor market should provide ammunition for continued spending,” Judge said.
Market Reaction
Gold ticked downward slightly following the higher-than-expected retail sales, but is still in positive territory at $1,273.60/oz, up 0.11% with a high of $1,277.64/oz and a low of $1,271.33/oz.
Gold Price Chart
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