U.S. Retail Sales Surge in March Driven by Record Gasoline Receipts Amid Iran War

U.S. Retail sales increased more than expected in March as the war with Iran boosted gasoline prices and led to a record surge in receipts at service stations, while tax refunds underpinned spending elsewhere.

Retail sales jumped 1.7% last month, the largest rise since March 2025, after an upwardly revised 0.7% gain in February, the Commerce Department’s Census Bureau said. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would advance 1.4% after a previously reported 0.6% increase in February. Estimates ranged from as high as a 2.0% increase to as low as a 0.4% gain.

Sales advanced 4.0% on a year-over-year basis in March. Economists estimated sales increased only 0.7% from a year ago when adjusted for inflation.

The Census Bureau has now caught up on releasing monthly retail sales data after delays caused by last year’s government shutdown. The retail sales report for April will be released on time next month.

Gas prices soared last month as a result of the war with Iran and the effective closure of the Strait of Hormuz, a critical channel for the transport of a fifth of the world’s oil. Sales at gasoline stations jolted higher in March by 15.5% from the month before. When excluding gas stations, retail sales rose 0.6% last month, a touch slower than the 0.7% increase seen in February for that comparable category.

Spending in other discretionary areas, such as electronics and building materials, held up as well – indications of consumers’ willingness to spend as well as the influence of tax refunds.

Furniture and home furnishings store sales, for example, were up 2.2%.

The Middle East conflict has sent global oil prices jumping more than 30%, with data from the U.S. Energy Information Administration showing retail gasoline prices soared 24.1% in March. The government reported last week that the monthly Consumer Price Index increased 0.9% in March, with gasoline being the main driver of higher inflation.

“Households remain resilient for now, potentially leaning on tax refunds and broader savings to keep on spending in the face of the latest price squeeze,” said James McCann, senior economist for investment strategy at Edward Jones.

President Donald Trump said on Tuesday he did not want to extend a two-week ceasefire with Iran.

The U.S.-Israel war with Iran is, however, casting a shadow over the economic outlook.