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April 17, 2012 – Retail sales exceeded expectations in March, but a good chunk of the month's gain was likely due to unusual circumstances, such as unseasonably warm weather and the release of the new iPad.

The U.S. Census Bureau reported Monday that total retail sales grew 0.8 percent in March. "However, it was anything but a typical March on the retail front," noted NAFCU Staff Economist Curt Long. "The new iPad, for example, helped electronics stores reach their strongest sales pace since last October."

Warm weather was also a factor. Building supply stores, in particular, benefitted from the warmer temperatures, as did vehicle sales, Long said. In the end, retail sales growth was led by building material and garden equipment stores (3 percent), followed by gas stations (1.1 percent), auto and other motor vehicle dealers (1.1 percent) and furniture and home furnishings stores (1.1 percent).

The most significant retail sales declines were reported by miscellaneous store retailers (-0.8 percent) and health and beauty stores (-0.2 percent).

Total retail sales excluding light vehicles increased 0.8 percent, and core retail sales, which exclude light vehicles and gas station sales, increased 0.7 percent.

Year-over-year retail sales growth improved from 6.4 percent to 6.5 percent. Year-over-year retail sales excluding motor vehicles rose 6.1 percent, while core retail sales increased by 5.8 percent from a year ago.

While employment gains, the release of pent-up demand and lower debt payments on behalf of consumers are all aiding retail sales, it appears unlikely that the current pace can be sustained over the near term, Long said. "While job totals have improved, wages have barely budged. In addition, declining house prices continue to eat into household wealth, while rising gas prices have hurt consumer confidence."

NAFCU's overall retail sales outlook continues to be "modestly positive," Long said, though "some of the sales gains of the mild winter can be expected to be given back in the coming months."

For more details, see the NAFCU Macro Data Flash on March's retail sales (login required).