Despite soaring inflation, consumer spending is still strong.
The U.S. Census Bureau reported today that retail and food service sales in March 2022 totaled $665.7 billion, marking a seasonally adjusted 0.5% increase from the previous month and a 6.9% leap from March 2021.
The Bureau also amended its numbers for February sales to represent a sales total of $$662.4 billion, or a 0.8% increase from January.
This growth in spending comes amid persisting high levels of inflation. Consumer prices rose by 8.5% in February compared with a year ago, according to the Bureau of Labor Statistics’ monthly report. This number was up from the 7.9% growth in February and represented the highest inflation rate since the 12-month period ending in December 1981.
For retail trade specifically, sales were up 0.4% month over month and up 5.5% over March of 2021. Gasoline stations sales were up 37% from March 2021 and food services and drinking places were up 19.4% from last year.
Clothing & clothing accessories sales were up 2.6% from February, and increased 7.3% compared with March 2021.
These sales numbers are not adjusted for inflation, which explains the massive 37% year over year gain in gasoline station sales. Compared to last year, the energy index in March rose 32%, partially a result of the conflict between Ukraine and Russia, which is causing spiking prices on commodities like oil in the U.S.
Consumers have recently expressed growing concern over rising costs due to inflation. In March, consumers said they expect inflation to grow 6.6% over the next year, according to the March 2022 survey of consumer expectations from the Federal Reserve Bank of New York’s Center for Microeconomic Data. This expectation is higher than the 6% growth over a year expected as of February.
The National Retail Federation (NRF) announced last month that it expects retail sales to grow between 6% and 8% to more than $4.86 trillion in 2022. This would mark a slowdown from the 14% growth in 2021, which represented the highest growth rate in over 20 years, but still sit above the pre-pandemic growth rate.
“It is now very clear that 2022 will be a much tougher year,” said managing director of GlobalData Neil Saunders in a statement. “Ironically, while the pandemic years delivered a boom in spending, the post-pandemic period will be much more frugal.”