Stimulus checks, vaccine progress, warmer weather and business reopenings combined for a perfect storm of consumer spending in March. According to new figures published by the U.S. Census Bureau on Thursday, retail sales jumped 9.8 percent on a seasonally adjusted basis last month, as all types of retailers except for restaurants and drinking places saw sales exceed pre-pandemic levels.
After a disappointing holiday season, U.S. consumer spending picked up steam in January 2021, when retail sales jumped 7.7 percent from the December total on a seasonally adjusted basis. Following a brief setback in February, consumer spending picked up again in March, jumping to $619 billion, as consumers flocked to stores to spend their $1,400 stimulus checks. The latest spending spree puts total sales for the January through March period 14.3 percent above the same period a year ago.
Due to the widespread lockdown instated to contain the spread of COVID-19, retail sales had plunged 14.7 percent in April 2020, following an already unprecedented 8.2 percent drop in March. To put this in perspective, the highest drop prior to March 2020 had occurred in November 2008, when retail sales declined by less than 4 percent at the height of the financial crisis. As the following chart shows, retail sales have very rarely dipped significantly in the past, with the financial crisis being the most notable exception of the past three decades.