US retail sales post biggest gains in 18 months
U.S. retail sales recorded their largest gain in 1-1/2 years in March, in the latest sign the economy was emerging from its weather-induced slumber and on track to accelerate in the second quarter.
The Commerce Department said on Monday retail sales increased 1.1 percent last month, the biggest rise since September 2012, as receipts rose in nearly all categories.
Retail sales, which account for a third of consumer spending, had risen by a revised 0.7 percent in February.
Economists polled by Reuters had forecast retail sales, advancing 0.8 percent last month after a previously reported 0.3 percent gain in February.
U.S. stock index futures extended gains on the upbeat report, while prices for U.S Treasury debt fell.
Retail sales added to employment data in suggesting the economy found momentum at the end of the first quarter after an unusually cold and snowy winter disrupted economic activity at the end of 2013 and the beginning of this year.
"January and part of February were affected by weather. Now we are seeing things are bouncing going into spring," said Craig Dismuke, chief economic strategist at Vining Sparks in Memphis, Tennessee.
Job growth averaged 195,000 per month in February and March. First-time applications for unemployment benefits in early April fell back to their pre-recession level.
That sets up the economy for a pick-up in the second quarter, as does a fading of the drag from the expiration of long-term unemployment benefits and cuts to food stamps.
First-quarter gross domestic product growth estimates range as low as a 0.6 percent annual pace. The economy expanded at a 2.6 percent rate in the fourth quarter.
Improving household wealth, thanks to a stock market boom, rising house prices and some uptick in wages, is helping to support consumption.
So-called core retail sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product, increased 0.8 percent in March.
That followed a revised 0.4 percent rise in February. Core retail sales had previously been reported to have increased 0.3 percent in February.
Despite the two consecutive months of gains, a drop in core sales in January suggests consumer spending will slow down substantially from the fourth quarter's brisk 3.3 percent pace.
Retail sales last month were buoyed by a 3.1 percent surge in receipts at automobile and parts dealers. That was the biggest advance since September 2012.
Excluding autos, retail sales were up 0.7 percent, the biggest increase in a year, after rising 0.3 percent in February.
Sales at building materials and garden equipment stores increased 1.8 percent, the largest rise in eight months.
Receipts at electronics and appliance stores, however, fell 1.6 percent. There were also declines in sales at gasoline stations, which fell 1.3 percent. Excluding gasoline, retail sales rose a solid 1.4 percent, the biggest rise in four years.
Sales at furniture stores increased 1.0 percent, as did receipts at clothing stores. There were also gains in receipts at sporting goods shops, restaurants and nonstore retailers.