Data released on Friday showed a larger-than-expected decline in US Retail Sales in March. According to analysts at Wells Fargo, the level of spending remains elevated, demonstrating there remains an underlying resilience among consumers.
Retail Sales slip again after unusually strong start to year
“But even with some payback after an unusually strong start to the year, the level of retail spend is still nearly 2% ahead of where it was in December. More plainly, consumers continue to spend at an elevated level, though the momentum appears to be downshifting.”
“The March retail sales data demonstrate continued reversal after an unusually strong gain in January sales. Consumers’ appetite continues to shift away from goods, particularly those that come with a high price tag or typically require financing. The rise in borrowing costs over the past year may be starting to bite consumers desire to take on credit card debt or purchase a new auto or appliance.”
“Lost momentum and the slow end to the first quarter for retail positions for a weak second quarter of spending. We anticipate consumer spending continues to gradually lose momentum through Q2 before growth slips negative later this year.”
