Inflation Takes a Toll on Retail Sales

What Thursday’s Economic Reports Tell Us

Woman Making Purchase at Store
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Retail sales edged up but were restricted by inflation, consumers’ outlooks grew surprisingly sunnier, and unemployment claims rose but were still low, reports showed Thursday.

Here’s a quick look at the most significant economic indicators of the day and what they tell us.

Retail Sales

  • Retail sales increased 0.5% to $665.7 billion in March from February, according to the Census Bureau. The report showed inflation beginning to restrict how much shoppers are buying, economists said.
  • Drivers spent 8.9% more at gas stations as fuel prices spiked, while spending on vehicles fell 2.1%. Shoppers spent less money at home and more going out and about, with online shopping receding 6.4% and restaurant sales rising 1%.
  • The bureau also said February’s sales grew 0.8%, rather than the 0.3% it initially reported. However, it’s likely that despite the increased spending in recent months, consumers actually bought less stuff because of inflation, economists said, with prices still rising quickly. 

Consumer Sentiment

  • The University of Michigan’s Index of Consumer sentiment—a measure of how people are feeling about their own finances and the economy in general—jumped 10.6% in early April, surprising economists who had expected the index to drop slightly. 
  • Part of the improvement came from the fact that gas prices have been falling, however slowly, and people expected that trend to continue, Richard Curtin, chief economist at the University of Michigan’s Surveys of Consumers, said in a commentary. Despite the unexpected increase in those expectations, people were still relatively gloomy about things overall. If not for the lower readings in February and March, the most recent index would have been the worst on record since 2011.

Unemployment Claims

  • The number of new unemployment claims ticked up to 185,000 in the week ending April 9, the Labor Department said. The number was an increase of 18,000 from the previous week’s level but still relatively low by historic standards, as employers stayed reluctant to let go of hard-to-find workers.


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Article Sources

  1.  Census Bureau. “Advance Monthly Sales for Retail and Food Services, March 2022.”

  2. University of Michigan. “Consumer Sentiment Index.”

  3.  Department of Labor. “Unemployment Insurance Weekly Claims.”