Topline
Retail and food service sales advanced at an unexpectedly high rate of 4.6% on a seasonally-adjusted basis in March, bringing the total year up 4.1% over previous year, the U.S. Census Bureau reported, showing that American consumers are still going strong despite or because of the pending Trump tariffs.
With hours to go before US President Trump announces trade tariffs for the UK, Europe and around the … More
Key Facts
All but two segments in retail posted growth in March, including the embattled department store segment, down 2.5% year-over-year.
The other loser, gasoline stations, which dropped 4.3% on lower gasoline prices, gave consumers more money to spend at their discretion.
Automobile dealers got the biggest bump in March, up 9.2% with consumers taking advantage of pre-tariff prices.
Furniture and home furnishings retailers and clothing and fashion accessories stores also benefited in advance of Trump tariffs, up 7.7% and 5.4%, respectively.
Yet even food service and drinking places got a 4.8% boost in March, signaling consumers are still looking have a good time.
Background
Despite a significant downturn in consumer confidence, which fell for the fourth straight month and is now more than 30% under December 2024 levels, consumer retail spending has remained counterintuitively strong. Commenting on March retail results, National Retail Federation chief economist Jack Kleinhenz said continued solid growth in income, lower energy costs and bigger-than-usual tax refunds strengthened retail sales. The NRF also stressed the March results reflect consumer spending after President Trump’s tariff announcement.
Crucial Quote
“On-again, off-again rising tariffs and resulting turmoil in the stock market and world economy are clearly impacting consumer concerns about higher prices and future consumer spending growth,” NRF’s Kleinhenz said in a statement.
Contra
“The March increases weren’t all tariff-related, though. The 4.8% YoY increase in bar and restaurant sales shows that consumers were more likely to spend on this discretionary experience. Perhaps things aren’t as dour as the consumer sentiment figures would lead you to believe. The past several years, Americans have continued spending despite financial worries and challenges. ‘Don’t underestimate the strength of the consumer’ is another potential read on today’s data,” Bankrate senior industry analyst Ted Rossman shared with me.
Tangent
Americans plan to increase spending on Easter celebrations this year. The NRF predicts spending will reach $23.6 billion, up 5% over last year’s $22.4 billion. Noting that holidays are more meaningful during times of uncertainty, NRF vice president of industry and consumer insights Katherine Cullen said, “During this time of economic uncertainty, consumers are prioritizing their Easter celebrations.” Even among those who don’t celebrate the Easter holiday, over half (54%) plan to take advantage of holiday-related shopping opportunities. Non-holiday celebrants expect to spend an average of $25.43 per person, $5 more than last year, and account for some $800 million of the holiday’s total spending.
Further Reading
Retail Sales Likely Rose in March, With Shoppers Trying to Get Ahead of Tariffs (Wall Street Journal, 4/16/2025)
Retail Sales Jumped 1.4% in March (Wall Street Journal, 4/16/2025)
