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16 April 2025 / Brief
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Copy LinkA robust increase in retail sales for March was expected and likely highlighted consumers pulling purchases forward ahead of widely anticipated tariff-driven price increases. The latest data suggest GDP growth will likely remain positive in Q1 2025, consistent with our latest projections, however growth is likely set to moderate significantly later this year as higher tariffs actually take place.
Figure 1. Car Purchases Fuel Headline Sales
Sources: Census Bureau, Haver Analytics, The Conference Board.
A strong increase in retail sales in March was mainly driven by an outsized rise in motor vehicles and parts purchases, which was already captured by the unit auto sales data released earlier this month. The spike likely resulted from consumers stockpiling ahead of steep tariff increases which took effect in the beginning of April.
The latest data will likely push tracking GDP estimates, such as Atlanta Fed GDPNow into positive territory for Q1 from the previously estimated contraction and closer to our own projection for a 1% q/q saar pace. We estimate real consumer spending will rise by about 0.5% q/q saar in Q1.
Despite a solid rise in Mar
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