Consumer spending on clothing, footwear and home goods all fell for the third straight month in March, the U.S. Bureau of Economic Analysis (BEA) revealed Friday in its Personal Income and Outlays report.
Clothing and footwear spending dipped slightly to $492.46 billion in the month compared to $492.53 billion laid out in February, while spending on the furnishings and durable household equipment was down a seasonally adjusted 0.13 percent to $485.67 billion.
The National Retail Federation (NRF) calculation of retail sales, which excludes automobile dealers, gasoline stations and restaurants to focus on core retail, released earlier this month, was inline with BEA’s data that showed March was unchanged seasonally adjusted from February.
That report, based on U.S. Census Bureau data, showed clothing and clothing accessories store sales were up 2.6 percent month-over-month, while furniture and home furnishings store sales rose 0.7 percent.
“While prices soared in March (the Consumer Price Index jumped an unadjusted 8.5 percent for the largest 12-month inflation increase since December 1981, as apparel prices ticked up a seasonally adjusted 0.6 percent) and eroded spending power, shoppers remained resilient and sales were healthy,” NRF chief economist Jack Kleinhenz said. “Consumers have the willingness to spend and their ability to do so has been supported by rapid hiring, increased wages, larger-than-usual tax refunds and the use of credit. They are largely dealing with the shock of gas prices but will be facing higher interest rates as the Federal Reserve tightens monetary policy in the coming months.”
Overall personal consumption expenditures (PCE) increased 1.1 percent, or $185 billion, in March. Real PCE, adjusted for inflation, rose 0.2 percent, as goods decreased 0.5 percent and services increased 0.6 percent.
BEA said the rise in PCE reflected increases of $114.6 billion in spending for services and $70.4 billion in spending for goods. Within goods, an increase in nondurable goods led by gasoline and other energy goods was partly offset by a decrease in spending on durable goods such as motor vehicles and parts. Within services, gains were widespread across all subcomponents, including food services and accommodations.
The PCE price index was up 0.9 percent, while the core PCE price index, excluding the volatile food and energy sector, increased 0.3 percent. The PCE price index for March was up 6.6 percent from a year ago, reflecting increases in goods and services, BEA noted. Energy prices were up 33.9 percent, while food prices increased 9.2 percent. Excluding food and energy, the core PCE price index for March rose 5.2 percent from a year earlier
Personal income increased 0.5 percent, or $107.2 billion, in March. Disposable personal income (DPI), a key gauge of retail spending potential, rose 0.5 percent, or $89.7 billion, in the month. Real DPI decreased 0.4 percent.
BEA note that the increase in personal income in March primarily reflected a rise in compensation, proprietors’ income, personal income receipts on assets and government social benefits. Within compensation, the increase reflected increases in both private and government wages and salaries.
The increase in proprietors’ income was in farm income, reflecting increased crop and livestock prices. The uptick in personal income receipts on assets was led by personal interest income, while the increase in government social benefits was led by Medicare and Medicaid.
Personal outlays increased $188.9 billion in March. Personal saving was $1.15 trillion and the personal saving rate–personal saving as a percentage of disposable personal income–was 6.2 percent.