Despite inflation, retail sales grew in March: NRF

WASHINGTON – According to the National Retail Federation, retail sales grew in March even as inflation edged higher.

“March retail sales show that consumers have maintained their ability to spend in the face of record-level inflation, supply chain issues and geopolitical unrest,” said Matthew Shay, NRF president and CEO. “Consumers are adapting and shopping smarter. We believe the strength of the consumer can carry the economy through this considerable economic uncertainty if policymakers implement measured policies and do not overreact to current conditions.”

The U.S. Census Bureau said overall retail sales in March were up 0.5% seasonally adjusted from February and up 6.9% year over year. That compared with increases of 0.8% month over month and 18.2% year over year in February. Despite occasional month-over-month declines, sales have grown year over year every month since May 2020, according to Census data.

Furniture and home furnishings stores were up 0.7% month-over-month seasonally adjusted and up 4.2% unadjusted year-over-year. General merchandise stores were up 5.4% month-over-month.

“While prices soared in March and eroded spending power, shoppers remained resilient and sales were healthy,” said Jack Kleinhenz NRF chief economist. “Consumers have the willingness to spend and their ability to do so has been supported by rapid hiring, increased wages, larger-than-usual tax refunds and the use of credit.”

“They are largely dealing with the shock of gas prices but will be facing higher interest rates as the Federal Reserve tightens monetary policy in the coming months,” he added. “The challenge for the Fed is to cool off demand without pushing the economy into a dramatic slowdown.”

NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants to focus on core retail – showed March was unchanged seasonally adjusted from February but up 4% unadjusted year over year. In February, sales were down 0.7% month over month but up 13.2% year over year.

NRF’s numbers were up 8.6% unadjusted year over year on a three-month moving average as of March. That is consistent with NRF’s forecast that 2022 retail sales will increase between 6-8% to total between $4.86 trillion and $4.95 trillion.