US March retail sales up 1.1%
March retail sales in the US were up 1.1% compared to February, the biggest increase since September 2012, according to data published by the US Census Bureau, part of the Commerce Department. Economists has predicted 0.8% growth.
February retail sales were revised upward to 0.7% growth from 0.3%. Out of 12 categories, ten showed healthy growth. Not only did auto sales do well in March, but also Internet retailers, department stores, restaurants, furniture and apparel.
Automobile sales increased 3.4% in March compared to the previous month, and were 9.5% higher than in March 2013. Garden supply and building material sales grew by 1.8% in March compared to February, and 5.7% versus March 2013. Internet retailers had a 1.7% increase in sales in March over February, and 7.8% year-over-year. Non-store (Internet) sales increased by 6.2% in March 2014 compared to March 2013.
This is very good news for the overall economy. In the United States, consumer spending accounts for approximately seventy percent of economic activity.
(Source: US Census Bureau)
US growth speeding up
March retail sales data suggest that the US economy is coming out of a sluggish January/February which was affected by severe winter weather. Analysts predict retail sales as well as the economy overall will grow even faster during the second quarter of 2014. Recent employment data point to an accelerating rebound.
Economists say that while the sales surge came too late to significantly push up economic growth for Q1 2014, it will likely fuel a strong rebound in Q2 2014.
In an interview with Bloomberg, Russel Price, a senior economist at Ameriprise Financial Inc., Detroit, said “It really is a story of pent-up demand. As employment levels continue to improve at a modest pace, so too should consumer spending.”
March retail sales and food services up
According to the US Census Bureau, US retail and food services for March reached $433.9 billion, an increase of 3.8% compared to March 2013. Total sales for Q1 2014 were 2.5% higher than in Q1 2013.
USA Today quoted Thomas Feltmate of TD Economics, who mentioned in a research note Monday “With the labor market continuing to heal, the housing recovery well underway, and household finances currently in the best shape that they have been for years, consumer spending should guide the ship from here on out.” He forecasts GDP growth of 1% in Q1 2014, lower than 2.6% in Q4 2013, but sees 4% growth in the second quarter of this year.