Consumers are in a spending mindset, and they’re on the hunt for new threads.
U.S. retail sales rocketed in March, soaring to a seasonally adjusted 9.8 percent, or $619.1 billion, from February. That jump represented the steepest increase since last May when nonessential retailers began reopening their doors. March’s gains weren’t as high as the 17.7 percent bump last May from the month before on an expected rise of 8 percent, but it was good enough, especially after February’s retail sales figures were revised to down 2.7 percent. March’s 9.8 percent increase was above the 6.1 percent consensus from economists.
“It’s hard to find any bad news in today’s retail sales report as re-openings, vaccinations, stimulus money, better weather and pent up demand all created a perfect confluence of factors to supercharge retail sales in March,” Mickey Chadha, vice president at Moody’s Investors Service, said.
Moody’s expects the upward trajectory to continue as a stronger macroeconomic environment and pent up demand will remain a tailwind in 2021, he added.
NRF last month predicted annual retail sales in 2021 will grow between 6.5 and 8.2 percent, with most of the growth to come in the second half. On Thursday, after the March report from the U.S. Census Bureau was posted, NRF said stimulus checks and the vaccination program gave shoppers good reasons to get out of the house.
“The dramatic increase of 17.7 percent in March retail sales over the same period last year confirms that a confident consumer is driving the economic rebound, and that should continue through the remainder of 2021,” Matthew Shay, NRF president and CEO, said. “American households are clearly feeling the full effect of additional fiscal stimulus, gains in the job market and the reopening of the economy. Although there have been some recent issues related to vaccines, consumer confidence remains high and an optimistic outlook for the future continues to grow.”
Seasonally adjusted data from the March report shows that sales at specialty apparel and accessories stores rose 18 percent to $22.86 billion from $19.33 billion in February, and were up 101 percent from March last year. Department store sales rose 13 percent to $10.81 billion from $9.57 billion last month, and increased 26 percent year over year. March figures represented easy comparisons due to year-ago coronavirus closures and consumers started shopping online in earnest. Nonstore retailers, which includes all e-commerce sites, saw sales in March increase 6 percent to $93.11 billion from $87.85 billion last month, and a 29 percent jump from March 2020.
“February’s severe winter weather kept many consumers at home, causing retail sales to fall across many categories. But March’s spring weather brought extra bright spots with further vaccine rollout and more stimulus checks hitting bank accounts, leading to a major surge in sales across all retail sales categories,” Naveen Jaggi, president of retail advisory services firm JLL, said. “With an additional 916,000 jobs added last month, more money is streaming into the economy. And as consumer confidence and demand continues to grow, we expect the sector to continue its strong rebound as we emerge from the pandemic.”
Also Thursday, the U.S. economy also received some good news from the jobs front. First-time claims for unemployment benefits fell to 576,000, and marked the best week since the start of the Covid-19 outbreak.
“With consumers still sitting on a pile of accumulated savings combined with the expected reopening of the service economy this summer, our forecast looks for a consumer spending boom this year that will rival any in living memory for most Americans,” said Tim Quinlan and Shannon Seery, economists at Wells Fargo Securities, in a report on their analysis of March retail sales figures.
Because of the ample personal savings that households have built up over the past year, the Wells Fargo analysts believe that the current momentum in consumer spending should stick around for some time.