April 14 (UPI) — U.S. retail sales were up for the third straight month in March, official figures said Thursday — led mostly by higher gas prices as inflation continued to impact consumer spending in the domestic economy.
The Commerce Department said in its monthly retail snapshot that sales rose by a modest 0.5% last month to $665.7 billion. The increase was led by higher gas prices, which saw a 36% hike over March 2021.
Gas prices climbed sharply in the month of March as the U.S. economy recovered from the COVID-19 pandemic, but Russia’s ongoing war in Ukraine helped in small part to push them to the highest level in more than a decade.
“The surge in gasoline prices put some serious upside to total retail sales,” analyst Beth Ann Bovino of S&P Global said, according to The New York Times.
Prices at the pump, however, have come down in recent days and weeks. AAA said earlier this week that the national average has plunged by more than 10 cents per gallon compared to the start of last week.
According to AAA, the national average on Thursday was $4.07, down another cent from Wednesday. Policy moves by President Joe Biden’s administration — including tapping into the U.S. strategic oil reserve — are largely responsible for the falling cost of gas, experts say.
Another cause of rising retail prices has been disruptions in supply chains that were initially spurred by COVID-19 and made worse by the war in Ukraine.
Thursday’s retail report noted that the increase in sales last month was also influenced by wage gains, hiring in the job market and more savings in Americans’ bank accounts.
To combat rising inflation over the past several months, the Federal Reserve has said it plans to raise interest rates again before the end of 2022. The Fed ordered a quarter-point rate hike at its policy meeting last month — its first in four years — as a direct result of rising inflation.
Thursday’s report said that total retail sales between January and March were up 13% from the same period a year ago. But although sales have risen recently, total consumer spending has slowed since January.