Retail Sales Surge in March, Reaching Fastest Pace Since 2017
Americans went on a buying binge in March, and their spending on cars, furniture and clothing resulted in the strongest increase in sales since September 2017, the Commerce Department said Thursday morning.
Overall, sales increased by a seasonally adjusted 1.6 percent during the month, and even when excluding the volatile auto and gasoline sectors, sales by retailers still posted a solid 0.9 percent gain.
Economists consider this report suggests that consumers feel confident enough about their finances to maintain their spending, overcoming fears after retail sales in December plunged 1.6 percent.
Sales rebounded somewhat in January, only to decline again in February.
During the past year, retail spending has grown 3.6 percent, the Commerce Department said.
Earlier this month, the Federal Reserve reported that consumer credit increased at a seasonally adjusted annual rate of 4.5 percent. The Fed’s monthly G-19 report said revolving credit increased at an annual rate of 3.25 percent, while non-revolving credit increased at an annual rate of 5 percent.
“March’s numbers are very encouraging and set the stage for improved expectations for the economy in the coming months, especially since the first quarter is typically weak,” said Jack Kleinhenz, chief economist for the National Retail Federation.
“These numbers boost first-quarter performance and suggest a [confident] consumer,” Kleinhenz continued. “It is clear that underlying consumer fundamentals including job and wage growth and healthy household balance sheets continue to support spending. Consumers were busy in March after weaker-than-expected spending earlier.”
He went on to suggest the numbers could have been better if not for cold weather early in March and changes in the timing of two key religious holidays.
“The change of seasons is always a factor because of the weather, and a later Easter and Passover this year mean holiday-related sales that took place in March last year won’t come until April this year and sizably impact year-over-year comparisons,” Kleinhenz explained.
Bloomberg economists Yelena Shulyatyeva and Carl Riccadonna wrote Thursday that “Stronger-than-expected retail sales in March that spanned multiple discretionary spending categories confirm that the slowdown at the start of the year was temporary.
“As transitory factors abated — including a lengthy government shutdown and a shock to household confidence in response to the fourth-quarter market rout — consumer spending recovered in full force,” they said.
Sales at auto dealers jumped 3.1 percent in March, while gas stations saw their sale climb 3.5 percent.
Spending at clothiers reported a 2 percent gain and furniture stores witnessed a 1.7 percent jump in sales.
Out of 13 retail categories, only one — sporting goods, hobby, musical instrument and book stores — reported a sales decline.
Spending at department stores was unchanged in March. Purchases in the sector that includes online businesses enjoyed a 1.2 percent increase. Restaurants saw their sales improve 0.8 percent.
“Retail sales ended 2018 abysmally and began 2019 extraordinarily,” Jefferies LLC economists Ward McCarthy and Thomas Simons wrote in a note. “With a boost from January and March, the consumer sector will be a source of growth again in the first quarter.”
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