US Retail Sales Hit 3-Year High Driven by Rising Fuel Costs

U.S. retail sales jumped by 1.7% in March, exceeding the projected 1.4% growth and marking the largest gain in three years. This represents a sharp acceleration compared to the 0.7% increase recorded in February, primarily driven by a 15.5% surge in gasoline spending as prices spiked due to geopolitical tensions. Beyond energy costs, the latest data indicates that tax refunds provided a significant boost to consumer spending across various other sectors. This broader resilience in spending may provide the Federal Reserve with more room to maintain its hawkish stance for a longer period to combat inflation. Investors are closely monitoring the impact on the USD and consumer-related ETFs like XLY as the market weighs economic strength against persistent price growth.