Americans increased their spending pace in March at a better-than-expected pace the previous month, underscoring how shoppers remain resilient despite inflationary pressures and other economic challenges.
Retail sales rose 0.7% last month after being up a revised 0.9% in February, according to the Commerce Department’s report on Monday. Sales fell a revised 1.1% in January, dragged down in part by inclement weather. Excluding gas prices, which have been rising, retail sales were still up a solid at 0.6%.
Sales at general merchandise stores rose 1.1%, while online sales rose 2.7%. Business at restaurants rose 0.4%. Electronics and appliance stores posted a decline, hurt by a still challenged home market.
A strong jobs market and rising wages have fueled household spending, which also has become choppy in the face of rising credit costs and higher prices.
America’s employers delivered another strong report in March, adding 303,000 workers to their payrolls and fueling hopes that the economy can overcome inflation without succumbing to a recession in the face of high interest rates.
Last month’s job growth was up from a revised 270,000 in February and far exceeded the 200,000 jobs that economists had predicted. By any measure, it amounted to a major burst of hiring, and it underscored the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand.
However, inflation has remained stubborn, lifted last month by by higher prices for gasoline, rents, auto insurance and other items, new data showed last week. That will likely delay a cut to interest rates that many had anticipated at the next meeting of the U.S. Federal Reserve’s monetary policy-making arm in a couple of weeks.
Prices outside the volatile food and energy categories rose 0.4% from February to March, the same accelerated pace as in the previous month. Measured from a year earlier, these core prices are up 3.8%, unchanged from the year-over-year rise in February. The Fed closely tracks core prices because they tend to provide a good barometer of where inflation is headed.
Overall consumer prices rose 0.4% from February to March, the same as in the previous month. Compared with a year ago, prices rose 3.5%, up from a year-over-year figure of 3.2% in February.