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US shoppers once again surprised Wall Street with a higher-than-expected jump in retail sales. The latest federal data shows sales rose 0.7% in March from the previous month, and 4% from the same period the year before, and economists are pointing the finger squarely at the labor market to explain the uptick.
“The ebullient gains in employment and sturdy wage growth provides consumers the income wherewithal to keep spending at a rapid pace,” Nationwide Chief Economist Kathy Bostjancic wrote in a research briefing.
The biggest winners were nonstore retailers, whose sales grew 2.7% from February and 11.3% YoY, the largest annual increase of any category.
Sales at food services and drinking establishments were the second-best category year over year, increasing 6.5% from March 2023.
However, specialized brick and mortar retailers continued to struggle.
- Sales were down 0.3% month over month at furniture stores;
- 1.2% at electronics and appliance stores;
- 1.1% at department stores;
- and 1.8% at sporting goods, hobby, musical instrument, and book stores.
Holding down the brick-and-mortar category, though, were general merchandise retailers, whose sales increased 1.1% month over month and 5.7% year over year.