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Allow us some late ’90s cringe for a second here: People be shopping.
At least, that’s what the latest batch of Census Bureau data, not a wince-worthy standup comic, had to say about the matter. Retail sales climbed 0.7% in March, handily beating the 0.3%–0.4% economists expected, per Dow Jones and FactSet.
And while the jump wasn’t as high as February’s 0.9% leap, it still marked the second consecutive month of gains.
The climb in spending is also notable given last week’s data from the Labor Department, which found that in March, the consumer price index rose 0.4% from the previous month, and 3.5% year over year. Even in the face of rising prices, people be shopping.
“March was a solid month for retail, but it fell well short of being spectacular,” Neil Saunders, managing director of GlobalData, told CFO Brew via email. “Notably, the numbers are flattered by an earlier Easter which, by our calculations, added some $7.4 billion in sales that last year were made in April. This boosted growth by 1.1 percentage points, meaning that without this benefit overall retail sales would have risen by a very modest 1.3% over last year.”
The solid retail stats could also complicate the Fed’s rate cut plans. Coupled with the hotter-than-expected March jobs report, the economy continues to look solid, likely giving the Federal Reserve little incentive to cut rates in the near future.
“With inflation running above target, economic growth continuing to show momentum, and elevated prices across a range of asset markets, the current stance of monetary policy is appropriate,” Kansas City Fed President Jeffrey Schmid, who won’t vote on interest rates this year, said last Friday, per CNN.
Michael Darda, Roth MKM’s chief economist and macro strategist, told Yahoo Finance the latest retail sales report amounts to a “body blow” to Fed rate cut expectations, adding that while interest rates could fall later this year, that’ll only occur if “it’s much more obvious that the economy is losing steam.”
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