March Retail Sales report from the Commerce Department comes out on Friday. February’s report saw only a 0.1 percent increase in retail sales. The upside of that report was the warm weather leading to more sales while the downside was due to a delay in IRS tax refunds. March could be the first month where retail sales could see a change due to executive actions by President Trump.
1. Travel Ban Dings Tourism
There have been two travel bans signed by President Trump since he took office. The first came at the end of January and was blocked by the courts. Then he signed another order in March, which the courts stopped once again. Travel Weekly reported that international flight books were down in February and continue to decline in March. This decline in bookings could hit the U.S. tourism industry for billions.
2. Fed Increases Rates
In March, the Federal Reserve raised its benchmark rate by a quarter percent to 1 percent. Since the Great Recession, the Fed raised rates only three times after dropping it down to zero. When the Fed’s rates go up, various industries tend to see a decline in sales.
3. Nintendo Flips Switch on Sales
Nintendo released their newest video game console on March 3 called the Nintendo Switch, which sold over 900,000 units in the month. Switch owners also picked up software and accessories to go with their purchases. With hardware priced at $300 and games at $60, electronics and game stores received a much-needed bump in sales for the month.
4. Retailers Hurting
Several major retailers announced they would start closing hundreds of stores due to lacking sales. J.C. Penney, Macy’s, Sears and Kmart started the process to liquidate hundreds of stores across the country. Radioshack and Payless also closed down stores in Mach as part of their bankruptcy. Loss of retail stores and jobs will have an effect on the month’s sales numbers.
5. Tax Refunds Cometh
The IRS delayed tax returns in February to curb tax fraud. Tax returns weren’t sent out until the second half of February. Those who file taxes earlier tend to be people who receive tax refunds and spend those refunds right away. February’s sales numbers were hit by the delay so expect a bounce back as more people received their funds.