Fuel, food prices lift March US retail sales; jobless claims rise | Business and Economy News

The unemployment rate remains at a two-year low of 3.6% with the unemployment rate rising slightly in March.

US retail sales rose in March, largely driven by higher gasoline and food prices, but consumers are showing signs of cutting back on discretionary spending amid high inflation.

The US Commerce Department said on Thursday, retail sales rose 0.5% last month. Data for February was revised higher to show sales up 0.8% instead of 0.3% as previously reported.

Economists polled by Reuters had forecast a 0.6 percent increase in retail sales, with estimates ranging from a low of 0.3 percent to a peak of 2.2 percent.

Food and gasoline or petrol accounted for the bulk of the increase in sales last month. Retail sales are primarily made up of goods and are not adjusted for inflation. Restaurants and bars is the only service category in the retail sales report.

Monthly consumer prices rose by the most in 16 and a half years in March as Russia’s war against Ukraine pushed US gasoline prices to record highs. According to the American Automobile Association, prices at the average pump rose to an all-time high of $4.33 per gallon in March.

“Higher prices for essentials, such as food and gas, mean consumers have fewer dollars to spend,” said Sam Bullard, senior economist at Wells Fargo in Charlotte, North Carolina. spend at other retailers.

Although rising prices are denting consumers’ purchasing power, rising wages are helping to alleviate some of the impact of high inflation.

The unemployment rate was at a two-year low of 3.6% and there were about 11.3 million jobs near a record at the end of February, which economists say has made it easier for some cash-strapped Americans to stay. Easier to get a second job or get a part-time job.

Tight labor market conditions were underscored by a separate report from the US Department of Labor on Thursday that showed initial state jobless claims rose 18,000 to a seasonally adjusted 185,000. for the week ending April 9.

Economists had forecast 171,000 applications in the latest week. Claims have fallen from a record high of 6,137 million in early April 2020.

Better job security also allows some consumers to take on more debt. Another stepping stone against inflation also comes from the huge savings accumulated during the coronavirus pandemic.

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