In like a lion, out like a lion for March Retail Sales

Summary

March retail sales handily exceeded expectations with various measures of core spending rising the most in a year or more despite sharp upward revisions. This is not the sort of spending associated with falling prices and brings upside risk to our 2.3% forecast for Q1 consumer spending.

Surge in e-commerce and an early Easter

Retail sales handily exceeded expectations, rising 0.7% in March, and excluding autos, sales rose 1.1%, the biggest monthly pop in over a year. The better-than-expected gains are even more remarkable given the sharp upward revisions to the February data. The initial 0.3% gain in retail sales ex-autos was doubled to 0.6% in the March release.

There were a few factors that could be lifting the sales figures starting with the timing of Easter. The earlier than usual timing of the holiday may have pulled some spending into March that in other years might have occurred in April. To the extent that this was at play we could anticipate some payback in April.

Another boost came from ecommerce. The 2.7% jump in online retail was the biggest gain for any category in March and also the largest sequential increase in 27 months (chart). Amazon hosted a “Big Spring Sale” March 20-25. It is not uncommon for other retailers to run competing promotions concurrent with Amazon's and that too may have been a factor underpinning the non-store category in March.

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