March 2015 Retail Sales

Americans consumed more from retail establishments in March than a month earlier according to the Census Bureau.  In total, $441.4 billion was spent in the period, an increase of 0.9 percent from February.  This tally is 1.3 percent higher than March 2014.  Also, the first quarter’s total improved by 2.2 percent versus the same period a year earlier.

Most categories in the report were higher than in February.  Americans spent more on automobiles, furniture, building materials, health & personal care, clothing, sporting goods, and general merchandise.  Atlas’ favorite component, food services & drinking places, also showed an improvement after declining a month earlier.  We pay particular attention to this segment because it represents an easily substituted discretionary expenditure.  If Americans are looking to spend less money, this is likely to be one of the first areas of the household budget to be cut.  March data show no sign of a change in the component’s upward trend.

First quarter retail sales lagged the prior quarter but ended on a high note.  This indicator demonstrates the slow pace of the economy as the year began.  However, March’s tally is a silver lining because it was the first time since November that the indicator improved on a monthly basis.  It is reasonable to infer the economy is thawing out after a challenging winter, analogous to the same period last year.  Consumer attitudes and spending in the next few months should help explain whether or not the recent slowdown has been a function of weather or is something more pernicious, like a change in the business cycle.              (by C. Cox)