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US retail sales rebound after three straight monthly declines
[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 on Monday retail sales increased 0.6 per cent last month after an unrevised 0.1 per cent dip in February. January data was revised to show sales falling 0.2 per cent instead of the previously reported 0.1 per cent drop.
Economists polled by Reuters had forecast retail sales rising 0.4 per cent in March. Retail sales in March increased 4.5 per cent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.4 per cent 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 per cent 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.
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 US economic activity, grew at a robust 4.0 per cent annualized rate in the fourth quarter. The economy expanded at a 2.9 per cent pace in the October-December quarter.
Growth estimates for the first quarter are running below a 2 per cent rate. The government will publish its advance estimate for first-quarter GDP growth later this month.
In March, auto sales jumped 2.0 per cent, the largest increase since last September, after declining 1.3 per cent in February. Receipts at service stations fell 0.3 per cent, reflecting cheaper gasoline.
Sales at furniture stores climbed 0.7 per cent while those at electronics and appliance stores increased 0.5 per cent. But sales at building material stores fell 0.6 per cent last month. Receipts at clothing stores dropped 0.8 per cent while sales at online retailers increased 0.8 per cent. Sales at restaurants and bars gained 0.4 per cent. Receipts at sporting goods and hobby stores dropped 1.8 per cent.