Retail Spending Surges in March, Defying Forecasts Despite Rising Energy Costs

New federal data show broad consumer strength across sectors, with gains extending beyond fuel-driven sales.

By yourNEWS Media Newsroom

U.S. retail spending rose sharply in March, exceeding expectations and signaling continued strength in consumer activity even as fuel prices climbed and geopolitical tensions persisted.

According to new figures from the Commerce Department’s Census Bureau, retail sales increased 1.7 percent for the month, accelerating from a 0.7 percent gain in February and surpassing economists’ projections of a 1.4 percent rise. On a year-over-year basis, total retail sales are up 4 percent.

While higher gasoline prices contributed significantly to the overall increase, the data showed spending gains across multiple categories, suggesting broader resilience in consumer demand. Sales at gas stations surged 15.5 percent from the prior month, reflecting a 21.2 percent increase in gasoline prices reported earlier by federal labor data.

Excluding fuel purchases, retail sales still rose 0.6 percent in March, outperforming forecasts for a 0.2 percent increase. Compared with a year earlier, non-gas retail sales climbed 2.9 percent, indicating continued spending momentum beyond energy-related purchases.

Economists said the results point to sustained consumer confidence, supported in part by strong labor market conditions. Unemployment remains low, layoffs have stayed near historic lows, and wage growth continues, with average hourly earnings rising 0.2 percent in March and 3.5 percent over the past year.

Additional factors, including larger tax refunds and reduced withholding tied to tax policy changes, are also believed to be contributing to higher disposable income and spending capacity.

Spending increases were recorded across a range of sectors. Sales at restaurants and bars rose 0.1 percent and are up 2.4 percent compared to last year, a category often viewed as a measure of discretionary spending. Auto and truck dealership sales increased 0.6 percent in March, though they remain down 2.4 percent on an annual basis.

Core retail sales, which exclude restaurants, gasoline, and auto dealers, rose 1.9 percent for the month and are up 4.2 percent year-over-year. A closely watched subset known as “control group” sales—used in calculating gross domestic product—rose 0.7 percent, marking the strongest gain since August.

Several sectors that had previously lagged posted notable gains. Furniture store sales rose 2.2 percent, while electronics and appliance retailers saw a 0.9 percent increase, bringing annual growth in that category to 5.2 percent. Department stores recorded a 4.2 percent monthly increase, though year-over-year growth remains modest at 0.8 percent.

General merchandise stores posted a 1 percent gain, while home and garden retailers saw a 0.7 percent increase. Grocery store sales rose 0.9 percent despite a slight decline in food-at-home prices, according to separate inflation data.

Online retail activity continued to expand, with sales increasing 1 percent in March and rising 10.1 percent compared to a year earlier.

Some categories showed little change during the month. Clothing store sales were flat, following strong gains earlier in the year, while spending on sporting goods, hobby items, and books also held steady, though both categories remain higher than a year ago.

The retail data are adjusted for seasonal patterns but not inflation. Consumer prices rose 0.3 percent in March, with core goods prices—excluding autos and energy—up 0.1 percent.

Overall, the March figures indicate that consumer spending remains a key driver of economic activity, with growth extending across multiple sectors despite higher energy costs and ongoing global uncertainty.