Consumer Spending Surged in March
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What headline money stories set the scene for this retail sales report?
With your money briefing, I'm Charlie Turner in New York for The Wall Street Journal. Good news on the economy. Consumers are in a spending mood. We'll talk with The Wall Street Journal's Sharon Nunn in a moment. First, here are some money headlines. Investors in Sprint and T-Mobile have been praying for a merger, but The Wall Street Journal says they may be disappointed. The Journal had reported that the two wireless carriers' planned merger is unlikely to be approved by the Justice Department. The bottom line seems to be that regulators are skeptical about the claim that the market would be more competitive with three players rather than the current four. A former Justice Department lawyer says he thinks the combination will only lead to higher prices and reduced quality.
Sprint and T-Mobile have appealed to the Trump administration's eagerness to beat China in the race for high-speed 5G mobile technology, but critics say 5G may have little relevance in antitrust matters. Shares of online image board Pinterest and video conferencing firm Zoom Video both soared in their trading debuts Thursday. The performance of the two will set the stage for the IPO market going forward. It's also important for Uber Technologies, expected to be one of the biggest IPOs ever, that is set to begin trading in early May. It follows the recent high-profile wobble of Uber rival Lyft, which has struggled after a strong trading debut. Investors said they were attracted to Pinterest's shares during the roadshow, won over by the company's strong growth.
While it isn't yet profitable, annual losses are narrowing. Pinterest's revenue is rising, and in the currently low interest rate environment, many fund managers are happy to scoop up fast-growing companies.
Why did Sprint–T-Mobile merger concerns and recent IPOs matter to investors?
Still ahead, the latest sign of strong consumer demand.
The latest retail sales report from the government indicates consumers are in a spending mood. The Commerce Department said retail sales jumped 1.6 percent in March from a month earlier. It followed a sales decline in February. Which categories led the gains and how did tax refunds figure into the numbers? We're joined by Wall Street Journal reporter Sharon Nunn, who's in Washington. Sharon, this report was a lot stronger than expected. Why the big jump in retail sales?
Yeah, that's a good question. Partially because sales had been so weak, and so generally when we have a pretty big drop or a consistent lull, there's usually at some point a pretty major surge of some sort, and that really seems to be what happened in March. But our economic outlook is pretty good at this point. We have a constant churning of jobs every month. The unemployment rate is low. We're seeing wages grow at a pretty fast pace, which really supports good consumer spending. especially while inflation is low, so it makes those paychecks go further.
What kind of stores did consumers spend the most in during March?
Yeah, it was pretty broad-based, which is always really good for economists and analysts to hear. We saw a lot of spending on lightweight vehicles at gas stations because gas prices went up. But more broadly, we saw a lot of spending at furniture shops and clothing stores. Those grew at some of the fastest paces in almost a year. The only category that we saw a dip in was sporting goods, books and hobby stores. So think of your Barnes and Nobles of the world.
Did gas and car purchases really boost the number? The number was still strong regardless, wasn't it?
Yes. Yeah, they certainly boosted it. But even if people just happened to not spend any money on cars or gas stations in March, retail sales were still strong regardless. But yes, certainly consumers bought vehicles. They spent more at gas stations last month. Yeah.
Now, if I'm reading this correctly, it looks like retail sales have been quite choppy the past few months, down in December, up in January, down again in February. What's going on here?
So there are certainly a few things here, and it's really hard to pinpoint exactly one cause, but there was the partial government shutdown, which certainly probably impacted economic output as government employees weren't doing the things they typically do.
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