US retail sales spike as consumers try to get ahead of tariffs

According to the US Department of Commerce, in seasonally adjusted terms, retail sales volumes increased at a month-on-month pace of 1.4% to reach $734.9bn (consensus: 1.3%).

That compared to a 0.2% increase in February.

Excluding motor vehicles and parts, sales were up by 0.5% (consensus: 0.3%) and if gasoline station sales were also left out then by 0.8%.

Sales of motor vehicles and parts grew by 5.3% and those of building materials by 3.3%.

Those at sporting goods and hobby stores were also strong, rising by 2.4% while those at food service establishments did so by 1.8%.

Non-store retailers only reported a 0.1% increase in sales, but after a 3.25 surge during the previous month.

Commenting on the latest figures, James Knightley at ING noted that US 'control group' sales were higher by just 0.4% over the month (consensus: 0.6%).

Control group sales leave out spending on volatile items such as autos, building supplies, petrol and dining out.

"The reports suggests that while we are likely to avoid a negative first quarter GDP print, it will only just scrape above zero and the potential rebound in the second quarter is unlikely to be huge given tariffs are soon going to be noticed at a time when consumer confidence is under pressure on three fronts: 1) anticipation of squeezed spending power after tariffs push up prices, 2) worries about a weakening jobs market amidst government spending cuts and 3) declining wealth after the sell-off in equity and bond markets."