Au­to­mo­biles drive US re­tail sales higher in March

Kuwait Times - - Business -

WASH­ING­TON: US re­tail sales re­bounded in March af­ter three straight monthly de­clines as house­holds boosted pur­chases of mo­tor ve­hi­cles and other big-ticket items, sug­gest­ing con­sumer spend­ing was head­ing into the sec­ond quar­ter with mo­men­tum.

The Com­merce Depart­ment said yes­ter­day re­tail sales in­creased 0.6 per­cent last month af­ter an un­re­vised 0.1 per­cent dip in Fe­bru­ary. Jan­uary data was re­vised to show sales fall­ing 0.2 per­cent in­stead of the pre­vi­ously re­ported 0.1 per­cent drop. Economists polled by Reuters had fore­cast re­tail sales ris­ing 0.4 per­cent in March. Re­tail sales in March in­creased 4.5 per­cent from a year ago.

Ex­clud­ing au­to­mo­biles, gaso­line, build­ing ma­te­ri­als and food ser­vices, re­tail sales rose 0.4 per­cent last month af­ter be­ing un­changed in Fe­bru­ary. These so-called core re­tail sales cor­re­spond most closely with the con­sumer spend­ing com­po­nent of gross do­mes­tic prod­uct. They were pre­vi­ously re­ported to have risen 0.1 per­cent in Fe­bru­ary. Last month’s pick-up in core re­tail sales will do lit­tle to change ex­pec­ta­tions of a sharp slow­down in con­sumer spend­ing in the first quar­ter.

The dol­lar was trad­ing weaker against a bas­ket of cur­ren­cies. Prices for US Trea­suries were marginally lower while US stock in­dex fu­tures rose slightly. Economists largely blame the weak­ness in re­tail sales at the start of the year on de­lays in pro­cess­ing tax re­funds. Some also ar­gue that in­come tax cuts which came into ef­fect in Jan­uary, only re­flected on most work­ers’ pay­checks in late Fe­bru­ary.

Con­sumer spend­ing, which ac­counts for more than two-thirds of U.S. eco­nomic ac­tiv­ity, grew at a ro­bust 4.0 per­cent an­nu­al­ized rate in the fourth quar­ter. It is ex­pected to have slowed to be­low a 1.5 per­cent rate of in­crease in the first quar­ter. Growth es­ti­mates for the Jan­uaryMarch quar­ter are run­ning be­low a 2 per­cent rate. The econ­omy ex­panded at a 2.9 per­cent pace in the Oc­to­berDe­cem­ber quar­ter. The gov­ern­ment will pub­lish its ad­vance es­ti­mate for first-quar­ter GDP growth later this month. In March, auto sales jumped 2.0 per­cent, the largest in­crease since last Septem­ber, af­ter de­clin­ing 1.3 per­cent in Fe­bru­ary. Re­ceipts at ser­vice sta­tions fell 0.3 per­cent, re­flect­ing cheaper gaso­line.

Sales at fur­ni­ture stores climbed 0.7 per­cent while those at elec­tron­ics and ap­pli­ance stores in­creased 0.5 per­cent. But sales at build­ing ma­te­rial stores fell 0.6 per­cent last month. Re­ceipts at cloth­ing stores dropped 0.8 per­cent while sales at on­line re­tail­ers in­creased 0.8 per­cent. Sales at restau­rants and bars gained 0.4 per­cent. Re­ceipts at sport­ing goods and hobby stores dropped 1.8 per­cent. —Reuters

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