US Markets
Monday, April 15th, 2024 2:23 pm EDT
Key Points
- Despite rising inflation in March, consumers maintained robust spending, outpacing expectations and leading to a 0.7% increase in retail sales, surpassing the Dow Jones consensus forecast of 0.3%.
- The Consumer Price Index rose by 0.4% in March, indicating an annual inflation rate of 3.5%, below the 4% retail sales increase, suggesting that consumers managed to keep up with inflation.
- Excluding auto-related purchases, retail sales surged by 1.1%, with notable growth in online sales (2.7%) and miscellaneous retailers (2.1%), although some sectors, such as sporting goods, hobbies, clothing stores, and electronics, experienced declines in sales.
In March, despite rising inflation, consumer spending surged at a faster pace than expected, as reported by the Commerce Department. Retail sales climbed by 0.7%, surpassing the Dow Jones consensus forecast of a 0.3% increase. While the consumer price index rose by 0.4%, indicating a 3.5% annual inflation rate, consumers outpaced inflation with their spending, which was below the 4% retail sales increase. Excluding auto-related purchases, retail sales soared by 1.1%, well above the estimated 0.5% rise. Gasoline prices contributed to the headline retail sales growth, with a 2.1% increase in sales at service stations, but the most significant growth occurred in online sales, up by 2.7%. However, some sectors experienced declines, such as sporting goods, hobbies, and clothing stores. The stock market and Treasury yields reacted positively to the report, reflecting market optimism despite escalating tensions in the Middle East. Consumer spending, a vital component of the U.S. economy, has remained resilient, buoying economic growth despite concerns about inflation and higher interest rates. This robust consumer spending could prompt the Federal Reserve to delay interest rate cuts, with analysts suggesting a potential delay until September. Additionally, the Empire State Manufacturing index, which tracks activity in the New York region, showed improvement in April but remained in contraction territory, indicating ongoing economic challenges despite the strong consumer spending.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/04/15/retail-sales-jumped-0point7percent-in-march-much-higher-than-expected.html
