Retail Sales Recover in March; 1Q Shows Modest Growth

By Mark Lieberman

Managing Director and Senior Economist


  • March retail sales – measured by prices – ROSE $2.76 billion or 0.6 percent from February;
  • Auto sales accounted for most of the increase, up just under $2 billion from February;
  • The increase in retail activity came in the same month in which the Consumer Price Index fell 0.1 percent which means consumer activity increased as prices dipped;
  • Sales at gasoline fell though as gasoline prices were essentially flat from February to March.
  • In addition to gasoline stations, sales fell at sporting goods stores, clothing stores and building material/garden supply stores;
  • Other than auto sales, which rose 2.0 percent, the largest jump in sales came at health and personal care stores.


  • Year-year total sales ROSE 4.5 percent in March, after a 4.1 percent February-February increase;
  • The increase in retail activity came in the same month in which the Bureau of Labor Statistics reported average weekly earnings rose at a 2.6 percent year-year pace, up from 2.5 percent in February;
  • BLS also reported the number of retail jobs in March fell 4,400 or .03 percent from February.

Data source: Census Bureau 

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Perhaps economists who forecast the demise of the economy in the wake of the wide-ranging tax cut enacted by Congress and signed into law by President Trump as a holiday gift were wrong. That at least could be the first blush conclusion from the Commerce Department’s retail sales report for March reflecting the first full month of increased take-home pay resulting from the new tax law.

The result was as average weekly earnings grew and workers kept more of their paychecks, when they opened their wallets there was something there to spend. They took advantage of lower prices and bought more goods.

BLS also reported the number of retail jobs fell in March, albeit 0.03 percent, but still a decline. Since one measure of retail efficiency is revenue (or perhaps profit) per employee, the drop in the number of jobs suggest even retailers themselves were pleasantly surprised by the sales volume.

Total sales in the first quarter were up $2.9 billion over the fourth quarter but up almost $59 billion over the first quarter last year. With personal consumption accounting for about 2/3 of Gross Domestic Product and retail activity about 55 percent of personal consumption, the numbers don’t suggest a robust GDP for the first quarter, tax cuts notwithstanding.

Hear Mark Lieberman on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, every Friday at 6:20 am Eastern Time. You can follow him on Twitter at @foxeconomics.  

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