Retail sales rise 0.5% in March amid soaring inflation
New Yor — Retail sales rose modestly in March as higher prices for food, gasoline and other basics dampened consumer spending.
Retail sales increased 0.5% after registering a revised 0.8% jump from January to February. Spending has been fueled by wage gains, solid hiring and more money in banking accounts. January’s increase of 4.9% was the biggest jump in spending since March 2021, when American households received a final federal stimulus check of $1,400.
Excluding an 8.9% increase from surging oil prices, overall retail sales were down 0.3% last month, the Commerce Department reported Thursday.
Business at general merchandise stores were up 5.4%, while clothing stores sales rose 2.6%. Online sales were down 6.4%.
Retailers are closely monitoring Russia's war with Ukraine and how it could weigh on shoppers' confidence but also worsen inflation. The conflict has already limited supplies of wheat, vegetable oils, and electronic components like chips. It's also pushed up fertilizer prices that were already high, made scarce supplies even harder to find and squeezed farmers, especially those in the developing world. In addition to the Russian invasion, rising COVID-19 cases and renewed restrictions in China could worsen supply chain issues.