There are two special factors to keep in mind for consumer spending in March and April. The two roll around at this time every year but are particularly acute in 2025.
The first is the timing of the spring holidays. In particular, the Easter observance falls nearly three weeks later in 2025 than it did in 2024. Easter Sunday is April 20 this year while it was March 31 last year. Last March got a boost from spending on holiday preparations and travel. That spending will occur in April. It should also be noted given the late timing of the holiday, March retail spending won’t benefit from some early bird shopping.
Another thing to note is that many schools time their spring break to coincide with Easter. This year spring break won’t benefit March with expenditures on travel. However, April might get some extra benefit from the vacation time, especially since travel plans may be more expansive during the warmer weather.
Without the extra travel in March, the declines in gasoline prices in March probably won’t get an offset in increased volume of sales in the report on retail spending. Conversely, gasoline prices are likely to rise in April in advance of the deadline of May for refineries to change over to summer reformulation. Although the seasonal factor allow for the increase, the volume of sales may be more than usual and boost the dollar value of sales at service stations.
The second is how the 2025 tax filing season is progressing. On the positive side is that this year’s average refund is larger than last year’s. Those larger refunds didn’t start to arrive in force until late in February. Some spending that might have occurred in February could be pushed into March. What is now in question is if consumers will spend those refunds at once. Some may go back into the economy in the near-term. Consumers often increase spending at home and garden stores in March to repair damage from the winter months and/or take up home projects in the spring. However, this year, some of that discretionary spending may be subsumed into nondiscretionary expenses. Some households may not spend the month until April, saving it for travel and holiday costs. Given low levels of consumer confidence, some of those refunds could just go into savings against anticipated hard times or to reduce debt.
The upshot is that how consumers behave this spring may reduce personal consumption expenditures late in the first quarter although spending that spending will probably be made up at the start of the second quarter. Those who try to gauge the health of the retail sector often average activity in March and April as more representative of the sector during the period. The retail year runs from February to January to accommodate normal activity over the winter and spring holidays. But the hard data of the monthly report on retail sales and the quarter GDP numbers don’t have that option.
The report on retail spending in March is set for release at 8:30 ET on Wednesday, April 16. The advance estimate for first quarter GDP will be released at 8:30 ET on Wednesday, April 30.
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