… and left the same as consumer spending slows
By Joe Higgins, Quest 4 Quality
- U.S. retail sales slipped 1% from February but were up 2.9% over March 2022
- Furniture store sales declined 1.2% month over month
- Sales at electronics and appliance stores were down 2.1% from February
Total U.S. retail sales slipped 1% in March from February.
The tally was well below economists’ expectation of an essentially flat month (up 0.4%), but was up by a substantial 2.9% increase year over year.
In our neck of the woods, March sales at U.S. furniture stores were down 1.2% from February, and electronics and appliance stores posted a 2.1% decline.
The March sales total represents the second consecutive month of declines, following a 3.1% increase in January. The trending is very concerning because we are beginning to see this same effect in other areas of the economy.
All the talk and media reports of recession hit consumers directly and reduces confidence in their job security. This effect is directly related to the health of consumer spending and retail sales. Keep in mind, consumer spending represents 71% of total gross domestic spending, and as such is an essential and reliable economic indicator.
We probably all considered that inflation, fluctuating gas prices, high mortgage rates, outrageous food costs and record credit card debt would at some point impact consumers’ desire and ability to continue spending. After a full year of interest rate hikes, declining consumer engagement is starting to become more evident.
The economy has been bolstered for almost three years, with unemployment rates at some of the lowest levels in decades along with rising wages. This alone has given wings to consumers to spend in an already overheated economy. But as I pointed out in my previous column, job creation and availability is trending down, which is concerning for consumers’ health.
With both spending and consumer savings down from their historic highs, I believe consumers will be more discriminating in their choice of when and where they go shopping. This could quickly pull down retail sales, at least for the interim, as they postpone discretionary purchases.
Joe Higgins is a 44-year veteran of GE and Whirlpool Corp. who brings his executive experience to bear as a business consultant, AVB keynoter and YSN contributor. Visit his website, Quest 4 Quality with Joe, at Q4QwithJoe.com.
