US Retail Sales Rise As Shoppers Brace for Trump Tariff Impact

U.S. retail sales rose in March, as consumers flocked to buy goods ahead of the Trump administration’s latest tariffs going into effect.

According to the U.S. Census Bureau, retail sales increased by 1.4 percent on a monthly basis in March, up from February’s 0.2 percent increase and slightly ahead of analyst forecasts of 1.3 percent.

Core retail sales excluding autos and gas also rose by 0.8 percent, flat with February’s upwardly revised increase.

Why It Matters

Retail sales constitute a significant portion of overall U.S. spending—around one-third according to some estimates—and are therefore taken as a key indicator of consumer confidence and the overall health of the U.S. economy.

Wednesday’s data could offer some relief to a sector that has struggled with multiple challenges since 2020, including reduced foot traffic and the accelerated shift to e-commerce driven by the COVID-19 pandemic. However, ahead of the release, analysts speculated that a sharp uptick in retail sales could reflect consumers rushing to make purchases in anticipation of upcoming price hikes linked to the administration’s trade policies.

What To Know

The March results cover spending that occurred after President Donald Trump announced tariffs on China, Canada, and Mexico in February, but prior to his “Liberation Day” announcements on April 2 of a 10 percent baseline tariff on all global imports, alongside what the Trump administration called “reciprocal” tariffs targeting dozens of trading partners. Those latter tariffs are currently subject to a 90-day pause as of April 9, with the notable exception of imports from China.

According to a separate report from the National Retail Federation (NRF), released on Monday, retail sales increased by 0.6 percent in March, with core sales excluding gas, autos and restaurants rising by 0.4 percent. According to the NRF, the greatest monthly increases were seen in food services & drinking places (1.5 percent), digital products (0.8 percent), and clothing & accessories (0.8 percent). NRF President Matthew Shay said that the rise “appears to be driven by the uncertainty caused by tariffs,” with consumers “stocking up” in advance of their expected effects.

Economists and officials have cautioned that the tariffs may lead to higher inflation in 2025. Federal Reserve Chair Jerome Powell recently echoed this concern, adding that the administration’s actions could also contribute to weaker economic growth over the course of the year.

What People Are Saying

ING Chief Economist James Knightley said prior to the release that the encouraging spending figures could complicate the Fed’s assessment of the health of the U.S. economy, telling CNN: “In the near term, we could have some really strong consumer spending numbers, but that just makes things a little bit tricky for the Fed… That means that the Fed just sits and waits to see what happens.”

Matthew Shay, president and CEO of the NRF, said Monday: “With the economic outlook unclear and the situation fluid, consumer sentiment is weakening, and many consumers are shifting disposable income into savings.”

What Happens Next

While the administration has said that the 90-day pause on reciprocal tariffs will allow countries to come forward and negotiate trade deals with the U.S., it has simultaneously increased tariffs on products from China. On Tuesday, the White House said that the the country “now faces up to a 245 percent tariff on imports” as a result of Beijing’s retaliatory actions.