As the spring selling season picked up and more full-price selling ensued, consumer spending on clothing and footwear increased.
According to the U.S. Bureau of Economic Analysis (BEA) report on Monday, spending on clothing and footwear ticked up a seasonally adjusted 3.3 percent in March to $421.58 million compared to the previous month.
This was even better than the 1 percent rise in retail sales in month-to-month comparisons reported by the U.S. Census Bureau, and the 2 percent for clothing and accessories stores in the period. It also followed a 1.4 percent month-to-month decline in February to $408.16 million. The inflated BEA numbers indicate higher-priced selling and the continued strength of online selling in the categories.
“March’s numbers are very encouraging and set the stage for improved expectations for the economy in the coming months, especially since the first quarter is typically weak,” National Retail Federation chief economist Jack Kleinhenz said of the Census Bureau report. “These numbers boost first-quarter performance and suggest a strong consumer…Consumers were busy in March after weaker-than-expected spending earlier.”
Overall personal consumption expenditures (PCE) increased 0.9 percent, or $123.5 billion, in March. Real PCE, adjusted for inflation, was up 0.7 percent for the month. The PCE price index increased 0.2 percent, or $87.4 billion, while the core index, excluding food and energy, rose less than 0.1 percent.
BEA said the rise in real PCE reflected a $66.3 billion increase in spending on goods and an increase of $27.9 billion in spending on services. Within goods, increases were widespread, with spending on motor vehicles and parts serving as the leading contributors.
Personal income inched up 0.1 percent, or $11.4 billion, in the month, while disposable personal income (DPI)—a key barometer of retail spending—increased less than 0.1 percent, or $6 million, as real DPI decreased 0.2 percent.
The increase in personal income in March primarily reflected gains in compensation of employees and government social benefits to people that were partially offset by decreases in personal interest income and farm proprietors’ income, according to BEA.
Personal outlays increased $126.5 billion in March and personal saving was $1.03 trillion. The personal saving rate (personal saving as a percentage of disposable personal income) was 6.5 percent.