Synopsis:

Morgan Stanley forecasts a robust March US retail sales report, with strength across multiple categories driven by solid labor income, seasonal tailwinds, and pre-tariff spending. The control group is expected to rise 0.7% month-over-month.

Key Points:

• Retail Control Group:
  Expected to rise 0.7% m/m, reflecting broad-based strength and improved transaction data for March.

• Headline Retail Sales:
  Forecasted to increase 1.2% m/m, supported by:

  • Pre-tariff auto purchases boosting auto sales.

  • Warmer weather contributing to stronger building material sales.

  • Restaurant activity rebounding after soft February figures.

• Macro Context:
  Morgan Stanley sees solid labor income and supportive seasonals as driving consumption resilience into Q2.

Conclusion:

Morgan Stanley expects strong retail momentum in March, led by autos and discretionary categories. If confirmed, this report may support confidence in consumer strength, helping temper recession fears and reduce urgency for near-term Fed easing.