March Retail Sales

The Commerce Department said retail sales rose 0.4% in March, marking their ninth consecutive increase.  Adding a positive slant to the headline number were revisions to January (up 0.2% to 0.8%) and February (up 0.1% to 1.1%).  On an annualized basis we see some slippage with the number now growing 7.1%, a full 2% drop from last month’s calculation.

Individual components of the report do show signs of broadening demand.  Most encouraging were the 3.6% rise in furniture & home furnishings, a 2.2% jump in building materials, and a 2.1% hike in electronics & appliances.  Perhaps we are seeing signs of life in the housing market.  Conversely these spending increases may just point to remodeling as more families decide to stay put and upgrade their current dwellings.

Besides the headline jump, we always turn to the core number which excludes volatile components such as autos and gasoline.  This figure showed a 0.6% increase.  Some analysts also exclude building materials to arrive at a core number; doing so would still show a 0.4% rise.  What doesn’t seem to get much mention this month is one footnote I found pointing to a mere 0.1% increase in overall retail sales for March if just gasoline was excluded.  Judging from what it takes to buy a tank of gas, this isn’t hard to believe.  If such a trend continues, look for other purchases to begin being squeezed out.