NEW YORK — Americans increased their spending in March at a better-than-expected pace the previous month, underscoring how shoppers remain resilient despite inflationary pressures and other economic challenges.
Retail sales rose 0.7% last month, following a revised 0.9% increase in February, according to Monday’s Commerce Department report. Sales fell by 1.1% in January, partly due to bad weather. Excluding gas prices, which have risen, retail sales still rose solidly by 0.6%.
Sales at general merchandise stores increased by 1.1%, while online sales increased by 2.7%. Turnover at restaurants increased by 0.4%. Electronics and appliance stores posted a decline, hit by a still difficult domestic market.
A strong labor market and rising wages have fueled household spending, which has also become choppy in the face of rising credit costs and higher prices.
U.S. employers delivered another strong report in March, adding 303,000 workers to their payrolls and fueling hopes that the economy can overcome inflation without succumbing to a recession caused by high interest rates.
Last month’s job growth was higher than February’s revised 270,000 and easily exceeded the 200,000 jobs economists had forecast. Either way, it amounted to a big burst of hiring, and it underscored the economy’s ability to withstand the pressures of high borrowing costs from the Federal Reserve’s rate hikes. As consumers continue to spend in the country, many employers have continued hiring to meet steady customer demand.
Inflation, however, has remained stubborn, pushed up last month by higher prices for gasoline, rents, car insurance and other items, new data showed last week. That will likely delay a cut in interest rates that many had expected at the next meeting of the U.S. Federal Reserve’s monetary policy department in a few weeks.
Prices outside volatile food and energy categories rose 0.4% from February to March, the same accelerated pace as the previous month. Measured compared to a year earlier, these core prices increased by 3.8%, unchanged from the year-on-year increase in February. The Fed closely monitors core prices because they generally provide a good barometer of the direction in which inflation is heading.
Overall consumer prices rose 0.4% from February to March, the same as in the previous month. Compared to a year ago, prices rose 3.5%, up from a year-on-year figure of 3.2% in February.