Re­tail sales re­bound a solid 0.6% in March

The Reporter (Lansdale, PA) - - BUSINESS - By Christo­pher Ru­gaber

WASH­ING­TON » U.S. con­sumers bounced back in March and bought more cars, fur­ni­ture and ap­pli­ances af­ter three months of de­clin­ing re­tail sales.

The Com­merce Depart­ment said re­tail sales rose 0.6 per­cent last month, the largest in­crease since Novem­ber. Auto sales jumped 2 per­cent, the most in six months.

Sales at re­tail­ers slipped in the first two months of this year as con­sumers pulled back af­ter heavy spend­ing dur­ing the win­ter hol­i­days. Last month’s fig­ures sug­gest Amer­i­cans are re­turn­ing to more free-spend­ing ways. Easter hol­i­day pur­chases also likely lifted spend­ing. Economists pre­dict that healthy con­sumer con­fi­dence, steady job gains and the im­pact of tax cuts will fuel solid spend­ing growth in the months ahead.

An­a­lysts were a bit dis­ap­pointed by the March fig­ures. Many had ex­pected a stronger bounce-back. Ex­clud­ing au­tos, sales were up just 0.2 per­cent.

“In short, a solid gain, but if any­thing a bit weaker in the key de­tails than gen­er­ally ex­pected,” said Jim O’Sul­li­van, chief U.S. econ­o­mist at High Fre­quency Eco­nom­ics.

Sales rose at gro­cery stores, restau­rants and bars, and drug stores. They fell at home and gar­den stores, cloth­ing shops and sport­ing goods stores.

On­line re­tail sales in­creased 0.8 per­cent in March and have risen nearly 10 per­cent com­pared with a year ago. That’s more than dou­ble the over­all re­tail sales gain in the past 12 months of 4.5 per­cent.

Re­tail sales are closely watched by economists be­cause they pro­vide an early read on con­sumer spend­ing, the prin­ci­pal driver of the U.S. econ­omy. Store pur­chases ac­count for about one-third of U.S. con­sumer spend­ing, while spend­ing on ser­vices such as hair­cuts and mo­bile phones plans makes up the other twothirds.

O’Sul­li­van es­ti­mates that con­sumer spend­ing grew at just a 1 per­cent an­nual pace in the first quar­ter. The slow­down fol­lows a 4 per­cent jump in con­sumer spend­ing in the fi­nal three months of last year, the strong­est gain in three years.

Economists fore­cast over­all eco­nomic growth slowed to be­low 2 per­cent at an an­nual pace in the first quar­ter, af­ter a 2.9 per­cent gain in the fourth quar­ter. But most ex­pect it will re­bound in the sec­ond quar­ter and top 3 per­cent.

MARY ALTAFFER — THE AS­SO­CI­ATED PRESS FILE

Shop­pers stand out­side the Bloom­ing­dale’s store on Broad­way in the Soho neigh­bor­hood of New York. On Mon­day, the Com­merce Depart­ment re­leased U.S. re­tail sales data for March.

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