A new report from the U.S. Census Bureau showed that advance estimates of retail and food services sales in March totaled $494.6 billion. That was a 0.6 percent jump from February’s downward-revised print, the first monthly gain of 2018, and much better than expected. “Core” retail sales, which exclude the volatile automobile and gasoline components, also increased in March (+0.3 percent). That was less than forecast but overall there was still broad strength seen in the retail sector last month. For example, 8 of the 13 major retail categories showed increases in March, with notable gains at furniture, electronics, and health & personal care stores. On top of a healthy labor market and elevated consumer confidence, refunds from 2017 tax returns likely also provided a boost to retail sales in March. Q1 GDP growth, though, is still projected to slow compared to the previous quarter, but this should only be a temporary setback if the recent seasonal pattern holds.
Sources: Econoday, U.S. Census Bureau, Bloomberg, FRBA, FRBNY, FRBSLPost author: Charles Couch