SW Retails Advisors Stacey Widlitz analyzes why retail spending was lower than expected in February at Claman Countdown.
US retail sales rose more than expected in March as consumers put big ticket purchases on the forefront to anticipated tariff-induced price hikes.
The Commerce Department released the data in March on Wednesday. This showed a 1.4% increase in retail sales on a monthly basis than the 1.3% increase forecast predicted by LSEG economists.
Excluding vehicle purchases, retail sales rose 0.5% in March, up 0.3%, up 0.3%, estimated by LSEG’s economist polls.
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Imported vehicles face 25% tariffs collected by President Donald Trump. (Getty Images/David Paul Morris via Getty Images/Bloomberg)
president Donald Trump’s In early April, 25% tariffs were enacted on imported cars and trucks, and industry analysts and manufacturers warned that car prices would be significantly increased.
The automaker reported a major jump in car sales in March. Some are thought to be in a hurry by buyers who “try to overthrow the tariffs.”
The report showed that sales by automobile and parts dealers rose 5.3% in March from a month ago, and 8.8% from the same month a year ago.
The fear of a recession, the rapid urge to see tariff uncertainty plunge into consumer sentiment
Retail sales in March helped consumers accelerate their purchase of vehicles before tariffs were implemented. (Frederic J. Brown/AFP via Getty Images)
“Faced with extreme uncertainty, consumers were rushing to buy durable items in March to avoid price increases from sudden tariff increases,” said Lydia Boussour, senior economist at EY.
“In fact, the biggest jump in car purchases in over two years and robust spending on other products such as building materials, sports goods and electronics will drive the purchase of big ticket items forward,” added Boussour. “However, as tariffs fall, as the economy cools sharply over the coming months, price-sensitive consumers are more wise to spend and poised to reduce non-essential purchases.”
“It’s bad for Americans to panic when consumer confidence buy cars as craters,” Comerica’s chief economist Bill Adams said.
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“The economic outlook is liquidity with significant changes in trade policy almost every day. Companies selling cars, appliances and electronics could have less demand in the next month or two months as the end of their panic purchases.
Reuters contributed to this report.
