US Retail Sales Slip Amid Economic Slowdown

US retail sales fell in March as inflation and a challenging job market dented sentiment in what is already a typically quiet period.

Revenue slipped 1% versus the previous month to $691.7 billion — adjusted for seasonal variation — compared with a 0.2% decrease in February, according to data the US Census Bureau released Friday. Smaller tax refunds and a later Easter holiday may also have affected sales.

“There are a number of factors influencing how today’s consumer is shopping, including inflation, the labor market, food and gas prices, and the path of interest rates,” said Steve Sadove, senior adviser for Mastercard.

Sales rose 2.9% from a year earlier, but growth was still down from February’s 5.9% year-on-year increase, the National Retail Federation (NRF) noted.

“March spending reversed the strong pace of core retail sales we saw earlier this year,” said NRF chief economist Jack Kleinhenz. “These results reflect both slower economic activity and lower prices because of easing inflation — which means fewer dollars spent even if consumers buy the same number of goods — but there is still a lot of spending in the economy. Keep in mind that households tend to shop less during the post-holiday season. In addition, tax refunds typically contribute to spending at this time of year but are smaller this year than last. Nonetheless, we are still looking at positive sales growth moving forward in 2023.”

In March, sales advanced year on year in only five of the nine categories the US Census Bureau monitors. The clothing and accessories segment — which includes jewelry — slid 2.2% and dropped 1.7% from February. Online sales across all products grew 12% relative to a year ago and gained 1.9% compared with the previous month.

Despite the slower start to the year, the NRF expects retail sales for 2023 to grow 4% to 6% to between $5.13 trillion and $5.23 trillion. However, that figure is lower than last year’s 7% increase and 2021’s 14% jump, which was the highest growth rate in over 20 years.

Image: A nearly empty shopping mall in Portland, Oregon. (Artyooran/Shutterstock)