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US retail sales surged 1.4% in March, the strongest monthly increase in over two years, driven by pre-tariff buying spurred by President Trump's trade policies. Car sales and home improvement purchases led the rise. Economists caution that this surge might be temporary, making it difficult to assess the true health of consumer spending. While March saw strong sales, consumer sentiment remains low due to concerns about Trump's tariffs, potentially leading to stagflation – a combination of slow growth and rising prices. The Federal Reserve faces challenges in responding to this situation.

Prepared by Christopher Adams and reviewed by editorial team.