According to some studies, there is currently a significant decrease in purchases in retail stores in the United States.
In the US, retail spending fell 1% in March. This is confirmed by a report issued by the Ministry of Commerce on retail spending in the country.
This means that, for now, consumers are starting to be more careful with the way they use their money. Not only does the report indicate that people are starting to cut back on their budgets, but that they are saving it to spend on essential products or services.
Also keep in mind that consumers are less likely to spend if they get smaller refund checks. Especially when compared to the refund checks received during the pandemic phase.
Therefore, fears of an economic crisis and a possible recession are some of the reasons for the decline in spending in retail stores during the month of March.
Economists polled by Refinitiv had expected retail sales in its monthly comparison to decline by 0.4%. However, the result in this regard was a 1% correction.
Causes and consequences
It’s no secret that small tax refund checks have kept consumers away from retail stores. In this sense, people avoid spending on durable products, such as home appliances and furniture.
Compared to February, retail spending contracted 3% during March. In contrast, spending at gas stations decreased by 5.5% in its monthly comparison.
This year the Internal Revenue Service (IRS) issued about $84 billion in refunds. But if a comparison is made with March 2022, that figure is $25 billion less.
Experts also point out that, near the end of tax season, the IRS received fewer returns this year than it did in the 2022 season.