Whatever anyone else’s reaction to the state of the U.S. economy might be, Americans seem to be willing to spend.
According to statistics released by the U.S. Commerce Department Monday, retail sales rose 0.7% in March – almost double what economists had forecast – after rising 0.9% in February. All of that comes after sales fell 1.1% in January, dragged down in part by inclement weather. Excluding gas prices retail sales still rose 0.6%.
AAA reported the national average gas price Monday was $3.63 per gallon, up 6 cents from the previous week ago and up 19 cents from last month. Those prices, though, are still 3 cents below where they were at this point last year.
The snapshot offers only a partial look at consumer spending and doesn’t include many services, including travel and hotel lodges. But the lone services category – restaurants – registered an uptick of 0.4%, according to the Associated Press.
Government retail data isn’t adjusted for inflation, which ticked up 0.4% from February to March, according to the latest government report. So retailers had a solid sales gain accounting for inflation.
“Retail sales aren’t increasing just because prices are going up,” Ted Rossman, senior industry analyst at Bankrate, told the AP. “Americans are actually buying more stuff. This is one of the strongest retail sales reports we’ve seen in the past couple of years.”
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.
“Consumers are becoming highly selective in their spending choices with many pulling back from pricier, non-discretionary products to focus on value and essentials and the lower-income cohort continues to be pressured,” Mickey Chadha, Moody’s Ratings vice president of corporate finance, told the AP. “Purposeful consumers are postponing their major shopping decisions.”
