Market Wire - Higher prices lift US retail sales, but the devil is in the details

Karl Schamotta, Chief Market Strategist: karl.schamotta@corpay.com

Rising food and gasoline prices lifted American spending last month, but soaring inflation rates continued to obscure a decline in real, inflation adjusted retail sales. According to figures published by the Census Bureau this morning, total receipts at retail stores, online sellers and restaurants climbed by a seasonally adjusted +0.5 percent month-over-month in March, but so-called “control group” sales - with gasoline, cars, food services, and building materials excluded - fell -0.1 percent.

Markets were expecting a +0.6 percent headline gain.

Gas station sales surged +8.9 percent month-over-month as the war in Ukraine lifted energy prices. Motor vehicle and parts dealers suffered a -1.9 percent decline, echoing a decline seen in March inflation data, released on Tuesday. 

A rotation back toward in-person shopping also appeared, with food services rising +1 percent and general merchandise stores seeing a +5.4 percent gain, even as non-store retailers fell -6.4 percent. 

Ten-year Treasury yields are holding near 2.68 percent, and the dollar is holding gains achieved after the European Central Bank’s less-than-hawkish statement earlier this morning.