Retail sales fell more than expected in March, according to the latest data from the Census Bureau.
- M-O-M: Advance estimates of U.S. retail and food services sales for March were $691.7 billion, down 1.0% from February.
- Y-O-Y: Despite the monthly drop, retail sales were up 2.9% when compared to the same time last year
Worse Than Expected. Economists projected a smaller 0.4% drop.
Gas Drop. Gas stations saw the biggest drop month-over-month with a 5.5% dip followed by general stores (-3.0%), department stores (-2.5%), and electronic stores and home improvement stores both down 2.1%.
- Not every category was down in March as online shopping jumped 1.9% followed by health & personal care stores (+0.3%) and sporting goods stores (+0.2%).
A Good Year. Year-over-year most categories were positive with restaurants leading the way with a 13% jump followed by online retailers (+12.3%) and health and personal care stores (+7.1%)
BOTTOM LINE: Consumers have clearly reached a breaking point with regard to prices. Inflation is already slowing but if consumer demand starts falling as well, expect inflation to see an even bigger drop.
