Total retail sales rise 1.4% in March as consumers rush to beat tariffs
Consumer spending was stronger than expected in March, fueled by surging auto-related sales as consumers looked to get ahead of potential tariff-related price increases.
Overall retail sales rose 1.4% month-over-month in March — the strongest gain since January 2023 — and increased 4.6% year-over-year, according to data released by the U.S. Census Bureau. That compared with increases of 0.2% month-over-month and 3.5% year-over-year in February.
The March increase was led by a 5.3% rise in sales at motor vehicle and parts dealers. Excluding auto-related sales, total retail sales in March rose 0.5% compared to expectations of a 0.3% increase.
March’s core retail sales — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.6% month-over-month in March and up 3.4% year-over-year. Core sales were up 2.6% year-over-year on a three-month moving average.
In other March results, sales at building material and garden equipment suppliers increased 3.3%, and sales at sporting goods, hobby, musical instrument and bookstore sales rose 2.4%. Receipts at food services and drinking places rose 1.8%
“Retail sales strengthened in March, supported by continued solid growth in income, lower energy costs and bigger-than-usual tax refunds that all helped support household budgets,” said Jack Kleinhenz, chief economist, National Retail Federation.
Spending increased in March even as as consumer sentiment has continued to decline. The University of Michigan Consumer Sentiment Index for April fell to its second-lowest level in the survey’s history, which dates back to 1952, while expectations for overall inflation during the next year rose.
“There is no question that the consumer is not feeling great given the confusion of policy announcements from Washington,” Kleinhenz cautioned. "On-again, off-again rising tariffs and resulting turmoil in the stock market and world economy are clearly impacting consumer concerns about higher prices and future consumer spending growth.”
Ted Rossman, senior industry analyst at Bankrate, noted that, similar to other recent economic data releases, the March results are “backward-looking data at a time when things are changing rapidly.”
“The impacts of tariffs on prices will become more clear in the coming months, and we need to continue to watch the job market, which was marred by the highest layoffs in years in February and March,” he said.
On Monday, the CNBC/Retail Monitor reported that core retail sales were up 0.4% month-over-month in March and were up 5.07% year-over-year. That compared with a decrease of 0.22% month-over-month and an increase of 4.11% year-over-year in February.
Both the Census and Retail Monitor results reflect consumer spending that came after President Donald Trump announced tariffs on China, Canada and Mexico in February, but before he announced a minimum 10% tariff on all U.S trading partners on April 2 along with sweeping “reciprocal” tariffs on dozens of countries.
The reciprocal tariffs were subsequently suspended for 90 days, but other tariff announcements have followed, and the situation remains fluid.
A survey conducted for NRF in March found 46% of consumers were stocking up on appliances, clothing and other items because they were worried that tariffs would bring higher prices.
