Timothy Gill, Vice President of Research and Chief Economist of the American Financial Services Association (AFSA), said that March retail sales surged due to seasonal factors and consumers accelerating purchases to avoid expected tariff hikes. However, he warned that weaker spending is likely ahead.
"Consumer spending, as measured by retail sales, received a jolt to the upside in March," said Gill, Vice President, Research & Chief Economist. "Some of the outsized jump in sales represented an early spring rebound following a noticeable loss of spending momentum during the first two months of the year. Consumers moving up by a month or two purchases they were already intending to make to get ahead of impending tariff-driven price increases."
In March 2025, U.S. retail and food services sales reached $734.9 billion, marking a 1.4% increase from February and a 4.6% rise year-over-year. According to the U.S. Census Bureau, this growth was driven by early seasonal shopping and consumers accelerating purchases to avoid impending tariff-related price hikes. Notably, sectors such as motor vehicles, building materials, and department stores experienced significant gains, reflecting both pent-up demand and strategic early purchasing.
The National Retail Federation (NRF) reported that core retail sales, excluding automobiles, gasoline stations, and restaurants, increased by 0.6% month-over-month and 3.4% year-over-year in March 2025. This data indicates that consumers were advancing purchases of durable goods, particularly automobiles, to preempt anticipated price increases due to tariffs. The NRF forecasts that core retail sales will grow between 2.7% and 3.7% in 2025 compared to 2024.
According to Reuters, U.S. retail sales in March 2025 rose by 1.4%, the largest monthly gain since January 2023, driven largely by consumers making preemptive purchases ahead of new tariffs imposed by the Trump administration. Auto dealership receipts surged by 5.3% in March after a decline in February as consumers rushed to buy vehicles before the 25% tariff on imported cars and trucks took effect. Economists caution that this surge may be short-lived due to slumping consumer sentiment, fears of inflation, and market volatility.
As per Equilar's report on Gill's career background, he serves as the Vice President of Research and Chief Economist at AFSA with nearly three decades of experience in business economics and industry analysis. Prior to joining AFSA, Gill was the Chief Economist at the American Iron and Steel Institute where he established the economics and industry statistics department.
