Retail sales post biggest jump in more than 3 years on record spike in gas prices

By Alicia Wallace, CNN

(CNN) — Americans saw large chunks of their wallets get gnawed away by soaring gas prices in March; however, consumers still had money left in the tank to spend elsewhere.

A record spike in gas prices drove US retail sales higher in March, rising by the fastest monthly pace in more than three years, new Commerce Department data showed Tuesday.

Retail sales jumped 1.7% in March, a sharp upswing from February’s 0.7% gain, marking the fastest pace since January 2023.

The retail sales figures are adjusted for seasonal swings but not inflation.

Economists were expecting high gas prices to lift retail sales by 1.6%, according to FactSet consensus estimates.

Gas prices soared last month as a result of the war with Iran and the effective closure of the Strait of Hormuz, a critical channel for the transport of oil.

Tuesday’s report showed that sales at gasoline stations jolted higher in March by 15.5% from the month before.

When excluding gas stations, retail sales rose 0.6% last month, a touch slower than the 0.7% increase seen in February for that comparable category.

Those spending gains were broad-based and even strong in some cases: Furniture and home furnishings store sales, for example, were up 2.2%.

Spending in other discretionary areas, such as electronics and building materials, held up as well.

However, apparel sales were flat, and restaurant sales were up a meager 0.1%.

“Overall, the American consumer is still healthy,” Heather Long, chief economist at Navy Federal Credit Union, wrote in commentary on Tuesday. “Extra income from tax refunds is helping many households weather this oil shock, but that extra money won’t last forever.”

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