US retail sales rebounded in March, helped by a rise in gas station revenues that masked mixed results in other major spending categories as consumers grapple with decades of inflation.
The value of total retail purchases rose 0.5 percent, figures from the Commerce Department showed on Thursday. While that came in just short of expectations, the previous month was revised sharply higher to show a 0.8 percent gain.
The rise in March was led by an 8.9 percent rise in gasoline spending. Excluding receipts at gas stations, sales fell 0.3 percent last month as vehicle and e-commerce purchases — the two largest spending categories — declined. The figures are not adjusted for inflation.
“In some discretionary categories, such as clothing and restaurant spending, the rise in nominal sales outpaced inflation, suggesting that the easing of pandemic-related restrictions is benefiting consumer spending, while in other components it was clear that inflation was playing a large role in the stimulus Spending,” said Omair Sharif, founder of Inflation Insights, in a note.
After the largest monthly percentage increase in average gasoline prices in six years, and coupled with rising costs for food and housing, Americans are having to make tougher spending decisions beyond the bare minimum.
Russia’s war in Ukraine is driving up energy and commodity costs and contributing to rampant inflation that is crumbling purchasing power.
There are other signs that this is already happening. Retailers like Bed Bath & Beyond blamed falling sales on inflation, which is hurting consumer confidence, and grocery chain Albertsons is preparing for lower spending from lower-income customers as food prices rise.
A report on Tuesday showed consumer prices rose 1.2 percent month-on-month in March, underscoring the painfully high cost of living and increasing pressure on the Federal Reserve to tighten monetary policy even more aggressively.
Data released on Wednesday showed that producer prices have also risen sharply, which will have an even greater impact on consumers.
Retail sales excluding autos and gasoline rose 0.2 percent last month after falling 0.1 percent in February, the Commerce Department report showed.
Still, several measures are keeping household balance sheets healthy, with the unemployment rate at 3.6 percent the lowest in five decades and savings boosted during the pandemic.
Separate data showed that initial jobless claims rose slightly last week but remained at historically low levels. Claims for benefits increased by 18,000 to 185,000.
Ten of the 13 retail categories showed growth over the past month.
Outside of gas stations, sales at convenience stores, electronics stores and clothing stores also increased. Non-store retailers, the second-biggest revenue category and volatile from month to month, fell 6.4 percent.
Grocery store receipts rose 1.3 percent, possibly reflecting a rise in food prices. Restaurant sales, the only services component of the report, rose 1 percent.
https://www.independent.ie/business/world/us-consumers-cut-back-on-shopping-to-pay-for-petrol-41555257.html US consumers are restricting their purchases to pay for gas