US Retail Sales Rose 1.7% in March Driven by Gasoline Price Surge

US retail sales jumped 1.7% in March, marking the largest increase since March 2025, according to the Commerce Department's Census Bureau. The surge was driven mainly by a 15.5% rise in sales at gasoline stations, the biggest gain since records began in 1992.

This uptick occurred as the war with Iran pushed global oil prices up more than 30%, with retail gasoline prices soaring 24.1% in March, per data from the U.S. Energy Information Administration. Economists had forecasted a 1.4% advance, with estimates ranging from 0.4% to 2.0%.

Sales rose 4.0% year-over-year. The report followed an upwardly revised 0.7% gain in February.

refunds provided a boost to consumer spending. The average tax refund increased by $351 through March 27 compared to the same period in 2025, according to Internal Revenue Service data. The Treasury Department estimated refunds would be $1,000 higher than in 2024 overall.

However, higher gasoline prices raised concerns about reduced spending in other sectors. Economists at the Stanford Institute for Economic Policy Research calculated that war-driven price spikes increased Americans' average annual gasoline costs by $857 this year.

“The upshot is that households remain resilient for now, potentially leaning on tax refunds and broader savings to keep on spending in the face of the latest price squeeze.”

at auto dealerships climbed 0.5%, possibly aided by manufacturer incentives. Furniture store receipts rebounded 2.2%, while electronics and appliance retailers saw a 0.9% increase. Building material and garden equipment stores reported a 0.7% rise. Non-store retailers advanced 1.0%, with gains also at food and beverage stores, general merchandise retailers, and health and personal care stores.

In contrast, sales at food services and drinking places edged up just 0.1%, down from 0.5% in February. Receipts at sporting goods, hobby, musical instrument, and bookstores remained unchanged, as did those at clothing retailers. Core retail sales, excluding automobiles, gasoline, building materials, and food services, increased 0.7% after a 0.6% rise in February.

The strong retail figures aligned with a 0.9% increase in the Consumer Price Index in March, largely due to gasoline prices. This data supported expectations of unchanged Federal Reserve interest rates in the near term. The Atlanta Federal Reserve's GDPNow model tracked a 1.3% growth pace for the first quarter of 2026, following a 0.5% rate in the fourth quarter of 2025.

Economists anticipated that consumer spending growth slowed from the prior quarter's 1.9% annualized rate.

“The tailwind from a blockbuster refund season will fade soon, causing households to cut back on discretionary spending as energy costs remain high." — Nancy Vanden Houten, lead U.S. economist at Oxford Economics (Reuters). Consumer sentiment fell to a record low in April. The government plans to release the advance first-quarter GDP estimate next week. The retail sales report for April is scheduled for on-time release next month, after delays from last year's government shutdown were resolved.”