Motor vehicle sales jumped 8.8% in March, according to the Retail Sales Report.
Retail sales jumped in March as consumers ramped up their purchases before the tariffs kicked in.
According to the U.S. Census Bureau’s retail sales report, consumer spending jumped 4.6% year-over-year to $734.9 billion. Further, retail sales rose 1.4% from February, which was better than estimates of 1.2%.
With tariffs taking effect in April, consumers rushed out to buy new and used cars. Specifically, retail sales for motor vehicle and parts dealers were up 8.8% in March compared to last year and 5.3% compared to February.
“March is historically the strongest month of the year for used-vehicle retail sales,” Scott Vanner, manager of Economic and Industry Insights at Cox Automotive, said. “This year, the combination of tax refunds and tariff talks pushed March sales to the highest level since 2021, with a significant double-digit increase over last year.”
Excluding cars, retail sales were up 3.6% year-over-year and 0.5% for the month. The latter topped estimates of 0.3% sales growth.
Cars and furniture sales surge
While car sales saw the biggest jump, sales increased nearly across the board, particularly for big ticket items like furniture. Furniture store sales jumped 7.2% year-over-year.
Further, sales for health and personal care stores rose 7.7%, while clothing retailers saw a 5.4% year-over-year increase in sales. Also, grocery store sales climbed 3.7% while general merchandize stores saw a 3.8% jump in sales.
However, department stores were one of the few areas that saw a decline, as sales dropped 2.5%. Gas station sales also declined by 4.3% due to falling gas prices.
Among other areas, food and drinking establishment sales surged 4.8%, sporting goods, hobby, musical, and book stores sales climbed 2.7%, and miscellaneous retailers experienced a 4.8% hike in sales.
Finally, non-store retailers saw sales increase 4.8% in March.
Taking a broader view, retail sales jumped 4.1% in the first quarter, year-over-year.
For the year, the National Retail Federation (NRF) expects retail sales to increase 2.7% to 3.7% in 2025.
“It’s the hard data on employment, income and tariff-induced inflation — not consumer sentiment — that supports our view of a slower trajectory for consumer spending,” NRF Chief Economist Jack Kleinhenz said.
