Consumer spending has kept rolling in recent months despite pandemic waves, port congestion, European conflict, and now inflation, as retail sales grew in March despite rising prices, the National Retail Federation (NRF) said today.
“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,” NRF President and CEO Matthew Shay said in a release. “Consumers are adapting and shopping smarter for themselves and their families. 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 found that overall retail sales in March were up 0.5% seasonally adjusted from February and up 6.9% year over year. Despite occasional month-over-month declines, sales have grown year over year every month since May 2020, government statistics show.
That growth comes even as inflation, which is measured by the Consumer Price Index (CPI) rose 8.5% in March from that month last year, following 12-month increases of 7.9% in February and 7.5% in January, the U.S. Bureau of Labor Statistics says.
Despite that pressure, 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 and up 4% unadjusted year over year. Likewise, NRF’s numbers were up 8.6% unadjusted year over year on a three-month moving average as of March. The group says that is consistent with its forecast that 2022 retail sales will increase between 6% and 8% to total between $4.86 trillion and $4.95 trillion.
“While prices soared in March and eroded spending power, shoppers remained resilient and sales were healthy,” NRF Chief Economist Jack Kleinhenz said in a release. “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. The challenge for the Fed is to cool off demand without pushing the economy into a dramatic slowdown.”