US Retail Sales Stay Strong in March

RAPAPORT... US retail sales grew in March as consumers continued to spend, thanks to increased wages and higher tax refunds.Revenue rose 0.5% from the previous month, versus a 0.8% increase in February, according to data the US Census Bureau released last week. March sales jumped 7% compared with a year earlier. "While prices soared in March and eroded spending power, shoppers remained resilient and sales were healthy," explained National Retail Federation (NRF) chief economist Jack Kleinhenz. "Consumers have the willingness to spend and their ability to do so has been supported by rapid hiring, increased wages, larger-than-usual tax refunds and the use of credit."The spending hike comes even as a number of challenges have affected the retail industry, the NRF noted."March retail sales show that consumers have maintained their ability to spend in the face of record-level inflation, supply-chain issues and geopolitical unrest," said NRF CEO Matthew Shay. In March, sales advanced year on year in seven of the nine categories the US Census Bureau monitors. The clothing and accessories segment - which includes jewelry - saw the second-highest growth, up 7.5%. Revenues for the category climbed 2.6% versus February. Online sales across all products rose 2.6% year on year but were down 6.4% compared to the previous month.The figures are consistent with the NRF's prediction that retail sales for the full year will increase 6% to 8% to between $4.86 trillion and $4.95 trillion, the group said. However, sales could slow down in the coming months depending on how the US government handles inflation.Consumers "will be facing higher interest rates as the Federal Reserve tightens monetary policy in the coming months," Kleinhenz added. "The challenge for the Fed is to cool off demand without pushing the economy into a dramatic slowdown."Image: People shopping at a mall in New York City. (Shutterstock)