Tariff Impact: Surge in U.S. Retail Sales Amid Economic Uncertainty

In March, U.S. retail sales saw a significant increase, the highest in over two years, as consumers rushed to buy vehicles and other goods ahead of anticipated price hikes due to tariffs. This surge, however, may not sustain as economic uncertainty and stagflation concerns persist.

March witnessed a notable uptick in U.S. retail sales, marking the largest gain in over two years, as consumers rushed to purchase vehicles and goods before tariffs pushed prices higher. Despite this boost, the economic outlook remains precarious, exacerbated by President Trump's trade policies.

Economists remain cautious, predicting only marginal GDP growth in the first quarter as concerns of stagflation loom. With high inflation persisting amid sluggish economic expansion, consumer confidence has waned, leading to potential reductions in spending. The Commerce Department reported a 1.4% increase in retail sales last month, higher than the expected 1.3% rise.

Analysts suggest the current retail surge could be short-lived as the market adjusts to new tariffs, especially on cars and trucks. Consumer sentiment is at a three-year low, with high inflation expectations potentially fostering precautionary saving over spending, further impacting future sales.

(With inputs from agencies.)