U.S. consumer spending: March retail sales still grew by 1.7% amid the aftermath of the Iran-U.S. war.

U.S. retail sales in March continued to grow beyond expectations amid increasing economic uncertainty due to the intensification of the U.S.-Iran war, demonstrating that American consumer spending remains robust.

Data released by the U.S. Department of Commerce on the 21st (local time) show that retail sales reached $752.1 billion in March, a 1.7% increase from the previous month. This figure exceeded the market expectation of 1.5% as reported by Dow Jones. Retail sales are a representative indicator of the actual purchase volume of goods by U.S. households both in physical stores and online, and are widely used to measure the resilience of personal consumption, which accounts for the largest share of the U.S. economy.

Considering the increased volatility in energy prices and financial markets since the outbreak of the U.S.-Iran war on February 28, this growth momentum is even more notable. Driven by higher gasoline prices due to the war, gas station sales increased, and other major categories such as furniture and electronics also performed well. This can be interpreted as not solely reflecting rising oil prices but as the result of overall consumer spending across various goods.

Earlier, the revised retail sales for February also showed a month-on-month increase of 0.7%, indicating that U.S. consumer spending has been on a clear upward trend for two consecutive months. Wall Street believes that tax refunds at the beginning of the year have especially helped boost the spending power of low-income groups. Refund funds are often quickly converted into essential goods or durable goods, serving as a short-term support for consumption.

Ultimately, this indicator suggests that despite geopolitical shocks, U.S. household consumption has not been significantly shaken. However, variables such as prolonged war-induced increases in energy prices, inflationary pressures, and interest rate levels could pose burdens on future consumption trends. While this trend again confirms that the short-term pillar of the U.S. economy lies in consumer spending, whether the impact of the ongoing war will spread to the overall real economy may determine the sustainability of consumption.