WASHINGTON, D.C. — According to official data released on Wednesday, U.S. retail sales saw an increase in March, driven largely by the automotive industry as customers hastened to purchase items prior to the implementation of new tariffs.
Total sales increased by 1.4 percent last month to reach $734.9 billion, as reported by the Department of Commerce in a statement. This figure slightly surpassed the market’s prediction of a 1.3-percent growth, Briefing.com noted.
The information included the time right before US President Donald Trump implemented significant new tariffs on trading partners, which caused turbulence in the financial markets.
A few days afterward, Trump suddenly and briefly reduced the import taxes to 10 percent for numerous nations but significantly increased them for China, which has the globe’s second-biggest economy.
The cost of tariffs was probably on the minds of consumers as their expenditure at motor vehicle and parts dealers increased by 5.3% compared to the previous month.
Expenditure at eateries and pubs went up by 1.8 percent from the month of February.
“Customers must possess both the desire to purchase and the capability,” said Dan North, a senior economist at Allianz Trade North America, according to Agence France-Presse (AFP).
He mentioned that the capability is due to disposable income, which is also decreasing. Therefore, the prospects for next month aren’t very promising.
Customers play a crucial role in driving the United States’ large economy, with expenditures bolstered by rising wages and a strong job market despite families using up some of their savings accumulated during the Covid-19 pandemic.
However, surveys indicated that consumer confidence plummeted in recent weeks as individuals worried about the impact of President Trump’s new tariffs.
“Amid significant uncertainty, consumers quickly purchased long-lasting items in March to dodge potential price rises due to substantial tariff increases,” noted Lydia Boussour, a senior economist at EY, in her communication to clients.
“However, as the economy is expected to slow down significantly in the upcoming months due to the impact of tariffs, cost-conscious consumers are likely to be more cautious with their expenditures and cut back on unnecessary buys,” she noted.