What: US retail sales rose 4.7% year over year in March, with purchases largely shifting to necessities and experiences.

Why it is important: While consumers were still spending, the year ahead is expected to be bumpy as the pace slowed in comparison to previous months and sales gains shrink as the year progresses.

E-commerce sales were up 13%, in-store sales were up 2.8%, lodging rose 23.5%, restaurants rose 11.6%, and sales at groceries advanced 5.6% according to Mastercard. Home improvement, furniture, and electronics continued to see a decrease in year-over-year growth.

The NRF has forecast that retail sales will grow between 4 and 6% this year for a total between USD 5.13 trillion and USD 5.23 trillion which would be slower than last year’s 7% growth, but still above the pre-pandemic average of 3.6%.

The chief economist for NRF stated that this year’s retail forecast was among the most difficult to prepare, as the economic environment in the US is anything but normal with historically low unemployment rates, consumers having excess savings, and the banking and financial markets being unsettled.

Consumer spending holding up but fragile