Retail sales surge as Americans seem unfazed by high prices

NEW YORK — Americans boosted spending at a hotter-than-expected pace in March, underscoring how shoppers remain resilient despite inflationary pressures and other economic challenges.

Retail sales rose 0.7% last month — almost double what economists had forecast — after rising 0.9% in February, according to Commerce Department data released Monday. The February figure was revised upward. That comes after sales fell 1.1% in January, dragged down in part by inclement weather. Excluding gas prices, which have been on the rise, retail sales still rose a solid at 0.6%.

The national average gas price Monday was $3.63 per gallon, per AAA, up 6 cents from a week ago, and up 19 cents from last month, but they’re still 3 cents below where they were at this point last year.

The snapshot offers only a partial look at consumer spending and doesn’t include many services, including travel and hotel lodges. But the lone services category — restaurants — registered an uptick of 0.4%.

Government retail data isn’t adjusted for inflation, which ticked up 0.4% from February to March, according to the latest government report. So retailers had a solid sales gain accounting for inflation.

“Retail sales aren’t increasing just because prices are going up,” said

Ted Rossman, senior industry analyst at Bankrate. “Americans are actually buying more stuff. This is one of the strongest retail sales reports we’ve seen in the past couple of years.”

A strong jobs market and rising wages have fueled household spending, which also has become choppy in the face of rising credit costs and higher prices.

America’s employers delivered another strong report in March, adding 303,000 workers to their payrolls and fueling hopes the economy can plow through higher prices without succumbing to a recession despite high interest rates.

Last month’s job growth rose from a revised 270,000 in February and far exceeded the 200,000 jobs that economists had predicted. By any measure, it amounted to a major burst of hiring, and it underscored the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With Americans continuing to spend, many companies have continued hiring to meet steady demand.

However, inflation has remained stubborn, lifted last month by by higher prices for gasoline, rents, auto insurance and other items, new data showed last week. That as well the strong retail sales report will likely delay a cut by the Federal Reserve to interest rates that many had anticipated at the next meeting of the U.S. Federal Reserve’s monetary policy-making arm in a couple of weeks.