Wholesale, import prices rise in March; Retail sales up .5%

Retail sales

Monthly retail sales were up .5% month-over-month in March, according to the US Census Bureau. The total sales were up 6.9% year-over-year.

The Bureau also posted a revision to its data for February, now stating the month saw an increase of .8% in retail sales over January, as opposed to the previous number of .3%. The revised number means February had growth of 18.2% over the same month in 2021.

As with the Consumer Price Index released earlier this week, rising gas and food prices drove the increase in this area. Gas station sales had a particularly notable spike, up 37% year-over-year. This came as the cost of fuel continues to rise amid record inflation and the Russian invasion of Ukraine. Data released by the government is not adjusted for inflation.

Putting the focus on consumer goods, the National Retail Federation completed a calculation of retail sales totals that excludes gasoline and food services. Its measure showed that these "core" retail sales were unchanged from February, and up 4% year-over-year.

Per the Census Bureau, the biggest month-over-month increases were in general merchandise stores (5.4%), electronics and appliances (3.3%), sporting goods and hobby (3.3%) and clothing stores (2.6%).

Nonstore retailers, which includes purchases made online, were down 6.4% from the prior month in March, according to the Census Bureau, but the total was up 1.1% year-over-year.

“March retail sales show that consumers have maintained their ability to spend in the face of record-level inflation, supply chain issues and geopolitical unrest,” National Retail Federation CEO Matthew Shay said in a statement. “Consumers are adapting and shopping smarter for themselves and their families.

Imports

Prices for imports were up 2.6% in March, which was the largest monthly increase since April 2011, according to the US Bureau of Labor Statistics.

This followed a 1.6% increase in February and a 2% rise in January.

Consumer goods followed the overall trend pattern. Data showed the import prices in the category had an uptick of 3% year-over-year. This was the largest rise since a 3.4% year-over-year increase reported in December 2011.

Exports

Prices for exports were up 4.5% month-over-month in March. Put together with increases in the first two months of the year, the BLS is reporting the largest rises in export prices since January 1989.

Prices for exports of consumer goods, meanwhile, were not in line with the overall trend, as it did not rise as dramatically. There was an increase of .8% in this category, according to the BLS.

Wholesale prices

The Producer Price Index, which measures the prices paid by suppliers and wholesalers before goods reach retail, also posted new highs in March.

The month-over-month increase of 1.4% was higher than the previous two months, the BLS reported Wednesday.

On a year-over-year basis, the BLS said there was an increase in the PPI of 11.2%. This is the highest increase since the government started releasing the measure in 2010.

The PPI's metric of prices for goods that leaves aside food, energy and trade services rose 0.9% in March. This was largest month-over-month increase of this measure since a 1% increase in January 2021.

The takeaway

Taken together, the measures show that everyone is paying more right now, whether they’re consuming, supplying or transporting goods. It’s why we’re not only seeing the price of goods on digital shelves go up, but also rare moves like a 5% surcharge from Amazon for fulfillment services.

Businesses must control costs as they bring in goods, while staying in line with consumer expectations as they look to sell them. It’s a fine line. Everyone is walking it.