The March advance retail sales report will offer a gauge of consumer confidence in the economic reopening as the U.S. gets a hold on the coronavirus pandemic with rampant vaccine distributions.  Here are five things to watch in the monthly report out Thursday at 8:30 a.m. Eastern time:


Just like in January, economists say the stimulus checks are likely to increase spending for March by 8%. Possibly even higher than January’s, considering the amount was the highest ever received. The report will show the substantial financial capability of consumers.

However, some economists are skeptical about this estimated increase, saying it will more likely be around 4% because the checks were not received until the second half of the month which could mean the stimulus spending would spread into April. 


Employment gains in March could also have boosted spending as many more people have additional sources of income. The March jobs report released earlier this month showed that employers added over 900,000 jobs for the month. On the flip side, the U.S. still has fewer jobs in the service industry than it did pre-pandemic. This could mean that services will not be able to meet demands of consumers.

U.S. employers added 916,000 jobs in March, 2021


The report is going to show the progress of economic reopening over the summer as the U.S. strives to move past the COVID lockdowns.  Spending has gone up and down over the past several months, but the projected growth in the report will show that consumers are growing more confident that the economy is reopening and in the rapid rate of vaccinations, faster than other developed countries. Consumers also have more opportunities to spend as the weather is getting warmer and restrictions are getting lifted.

“They’re wanting to engage and they’re spending more,” said Stephen Gallagher, chief economist at Societe Generale.  


Economists say this may be the last surged growth we see in retail sales. Growth in sales of goods could stall as consumers shift their spending towards services like travel, concerts and leisure activities. The sale of gasoline would be a metric to show how Americans are spending their time outside. The service sector, which has taken the brunt of the pandemic, is going to be next on the rebound list. 


Economists say consumers are more likely to save a portion of their stimulus checks, as high as 30% because the stimulus was very high. Because households’ balance sheets are in good shape, consumers could be saving and or looking to invest their stimulus checks. Consumers could also be saving because they have grown weary of buying goods for themselves and their homes. This, economists say, could put a dent in the March spending.  

Savings rate increased in the months the stimulus checks were distributed. 33.7% for April, 2020 and 19.8% for January, 2021.

“There may be fatigue amongst consumers,” said James Knightley, chief international economist at ING Financial Markets LLC. “How much physical stuff do we need? People may be looking at saving a little bit more and people may be looking at investing some of it as well.”

Comments are closed.