April 16, 2025

 

 

 

 

 

 

Retail sales rose  1.4% in March after climbing 0.2% in February after having fallen 1.0% in January.   In the past year retail sales have risen 4.4%  The wildfires in California that raged from January 7 through the end of January, and the bitter cold weather throughout the rest  of the country. took a big toll on sales in January,  They rebounded only modestly in February but climbed more sharply in March.  Some argue that the big jump in March represents consumers stocking up on goods prior to the implementation of tariffs.  Car sales did, in fact, jump in March which would fit that theory.  But then why were car sales so depressed in January and February?  Stocking up to beat the tariffs should have begun sooner.  Also, restaurant sales jumped in March.  You obviously cannot stock up on dining out.  Our conclusion is that sales remain relatively solid.  Despite being depressed, the consumer remains willing to spend.

Motor vehicle sales jumped 5.3% in March after having fallen 1.6% in February and having declined 3.4% in January. Car sales have risen 7.8% in the past year.

Retail sales ex autos and gas, which eliminates the two most volatile components and is a better gauge of the trend pace of sales rose 0.8% in both February and March after declining 0.6% in January.   In the past year this so-called core spending pace has risen 4.5%.

Restaurant sales climbed 1.8% in March after having declined 0.8% in February and  having risen 0.5% in January.   In the past year restaurant sales have risen 5.0%.   Consumers continue to dine out, but their spending on restaurant meals has clearly slowed in the past year.

Sales at nonstore retailers rose 0.1% in March after having jumped 3.2% in February after having fallen 2.3% in January.   In the past year nonstore sales have risen 5.0%.

The combination of a 1.4% increase in sales with a 0.1% decline in the CPI caused real retail sales to rise 1.5% in March after having been unchanged in February after  having plunged by 1.5% in January.  Real sales have risen 2.0% in the past year.  The drop in real retail sales in January appears to have been caused by the California fires and the bitter cold weather elsewhere.  It failed to rebound in February but rebounded strongly in March.

Stephen Slifer

NumberNomics

Charleston, SC