Synopsis:

CIBC sees March’s retail sales data as a sign that US consumers remained resilient despite rising trade tensions. Strong gains across most categories and upward revisions to prior data suggest consumer spending held up well at the onset of the tariff shock.

Key Points:

• Headline Strength:
  Total retail sales rose 1.4% m/m, in line with expectations.

• Control Group Slightly Softer but Revised Up:
  The core control group (which feeds into GDP) rose 0.4%, slightly below expectations, but February was revised up to 1.3% from 1.0%.

• Broad-Based Gains:
  11 of 13 major retail categories saw gains, reflecting solid consumer breadth.

• Weather Rebound & Year-End Spending Payback:
  Winter weather and prior strong spending had slowed activity in Jan-Feb, but March marks a healthy bounce.

• Recession Risk Eased—for Now:
  The report helps allay fears that US consumers might pull back sharply due to trade war escalation.

Conclusion:

CIBC believes today’s data shows the US consumer is still spending robustly, providing an early buffer against recession risks tied to the trade war. While sentiment could sour if tensions escalate further, for now, the consumer remains a source of economic stability.