January’s retail sales were revised upwards from +0.2% to a +0.7% monthly gain, but February’s sales dropped -0.2%. Sporting goods/hobby stores led January’s sales gains at +5.2%, followed by online retail (+4.5%) and building materials (+4.4%), while February’s gains were led by gasoline stations (+1.0%) and online sales (+0.9%). Sales dropped the most in January for motor vehicles (-1.9%) and gasoline stations (-1.2%), and in February for building materials (-4.4%), miscellaneous stores (-1.6%), and electronics (-1.3%). On a yearly basis, sales were up +2.2% overall, with a +10.0% gain for online retailers, +5.9% for health and personal care, and +3.6% for food, but drops of -8.8% for sporting goods/hobby stores, ‑4.6% for miscellaneous stores, and -3.2% for gasoline stations.

A $4.3 billion drop in civilian aircraft orders was the driving force in a $4.2 billion (-1.6%) overall decrease in durable goods orders for February, with orders excluding transportation up +0.1% for the month. Defense aircraft orders were up $113 million (+2.5%), and excluding all increases in defense spending brought new orders down by -1.9%. Orders for core capital goods, which exclude both transportation and defense, were down -0.1% for the month and only up +2.6% for the year.

The unemployment rate remained at 3.8% as nonfarm payroll employment increased 196,000 in March, and February’s 22,000 increase was revised to 33,000. Employment increased for healthcare (+49,000), professional services (+34,000), food services (+27,000), and construction (+16,000), but decreased for manufacturing (-6,000). Hourly pay gains slowed from +3.4% in February to +3.2% in March, with yearly gains up +3.2% to $27.70/hour overall, and $23.24/hour for nonsupervisory employees. The U6 unemployment rate, which also includes underemployed and discouraged workers, remained at 7.3% vs. 7.9% a year previously, while the workforce participation rate dropped from 63.2% to 63.0%.