Retail sales rose 1.4% in March, matching forecasts and serving as the best reading in over two years in the latest sign of the US economy’s resilience before this month’s sweeping reciprocal tariff announcements.
Headline retail sales rose 1.4% in March, matching economists expectations and well above the 0.2% increase seen in February, according to Census Bureau data. This was the best monthly increase since January 2023.
The control group in Wednesday’s release, which excludes several volatile categories and factors into the gross domestic product (GDP) reading for the quarter, rose 0.4%. Economists had expected a 0.6% increase. The metric’s February rise was revised higher to 1.3% from a prior reading of 1%.
March sales, excluding auto and gas, rose 0.8%, above consensus estimates for a 0.6% increase. Sales for autos alone rose 5.3% in March.
The reading comes amid fears the US economy may be growing slower than Wall Street initially thought to start 2025. And that’s before any negative impacts of the “Liberation Day” tariffs set in.
Oxford Economics deputy chief US economist Michael Pearce wrote in a note on Wednesday that March’s retail sales spike was “buoyed by tariff front loading.”
“The strong rebound in retail sales in March was boosted by a surge in auto sales and a more general front-loading of consumer spending ahead of tariffs,” Pearce wrote.
Read more: The latest news and updates on Trump’s tariffs
Other categories receiving a boost in March included building materials, which saw sales rise 3.3%, and sporting goods, where sales rose 2.4%.
A few categories flattering the overall data, however, don’t detract from arguments that the US economy is entering a period of tariff uncertainty with consumers in good standing.
“The 1.8% leap in food services sales, meanwhile, pushes back against the notion that discretionary spending on services was already collapsing heading into the tariff shock, particularly since February’s 1.5% decline was revised to a less-dramatic 0.8% fall,” wrote Oliver Allen, senior US economist at Pantheon Macroeconomics, in a note on Wednesday.
Allen added that other high-frequency data, like hotel and restaurant spending, continues to hold up, which “tentatively suggests spending on services will continue to grow at a moderate pace” as tariff impacts kick in.
With President Trump’s tariffs pushing the effective US tariff rate to its highest level in a century, economists widely expect the new policies to boost inflation and slow economic growth.