Survey: Retail sales to show 5.8% surge

Stimulus, job growth vaccinations seen as big boosts in March.

U.S. retail sales probably swelled in March thanks to faster hiring, the distribution of federal stimulus checks, a steady pace of COVID19 vaccinations and fewer restrictions on stores across the country.

Today’s report from the Commerce Department will show retail receipts surged by 5.8% in March after a 3% decline in February, according to the median estimate in a Bloomberg survey of economists. Several forecasters project at least a 10% gain, which would be the largest since May — when the economy began emerging from initial pandemic lockdowns.

“I really think it’s going to be a pretty spectacular report,” Michelle Meyer, head of U.S. economics at Bank of America Corp., who estimates a 11.5% gain. “The question will be what comes next, we can’t repeat these gains, we won’t have stimulus checks every month.”

Personal incomes were boosted during the month by the distribution of $1,400 stimulus checks from the latest federal pandemic aid bill. Further, the labor market added more than 900,000 jobs last month.

“Stimulus was pumped into

the economy in March and consumers have responded to that by increasing spending,” Meyer said. “And more people were put to work in March and are more comfortable with their job security.

It’s a very powerful combination.”

In addition to rising incomes, “rapid vaccination and gradual reopenings across the country should drive sales that have been particularly depressed due to the pandemic, including restaurant spending and apparel,” James Sweeney, chief economist at Credit Suisse Group, said in a note.

The data represents a sharp snapback from February, when retail activity was hindered by cold weather and winter storms. Warmer temperatures in March allowed for more outdoor activities, likely benefiting restaurants and service businesses.