By The numbers: Sales at U.S. retailers rose a tepid 0.5% in March and a large part of the increase reflected higher gasoline prices, suggesting inflation is taking a toll on U.S. households.
Economists polled by The Wall Street Journal had forecast a 0.6% advance.
One bit of good news: Sales in February were revised up to show a 0.8% increase instead of 0.3%, the government reported Thursday.
If gas stations and auto dealers are set aside, retail sales rose an even smaller 0.2% in the month.
Retail sales are a big part of consumer spending and offer clues on the strength of the U.S. economy. While Americans are still buying lots of goods and services, they often simply just paying more money.
Big picture: Americans have plenty of savings built up during the pandemic and they feel secure in their jobs. That’s given them the confidence to spend.
High inflation is altering their spending plans, however, and making them think twice about what they buy and how much. Rising prices could curb economic growth unless they relent soon, analysts say.
Market reaction: The Dow Jones Industrial Average
DJIA,
+1.01%
and S&P 500
SPX,
+1.12%
surged in Wednesday trades.
