Economy Watch: Retail Sales See Healthy Uptick in March

Marco Green
April 17, 2018

Online retail sales increased 0.8 percent in March and have risen almost 10 percent compared with a year ago.

Personal consumption and retail spending had disappointed analysts in recent months, feeding expectations the U.S. economy will see slower growth in the first quarter of the year. On a year-on-year basis, building material sales rose a sound 5.3 percent year-on-year, and the fall in March probably reflects a give back after post-hurricane rebuilding activity in earlier months, noted TD Economics in a research report.

The data April 16 also showed that a decline in gasoline costs, as reported last week in the Labor Department's consumer-price index, may have weighed on filling-station receipts.

Retail sales are closely watched by economists because they provide an early read on consumer spending, the principal driver of the USA economy.

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. The economy expanded at a 2.9 percent pace in the October-December quarter.

The improvement in demand went beyond a bump in auto sales, as consumers went shopping at furniture and home stores along with electronics and appliance sellers. Excluding automobiles and gasoline, sales advanced 0.3% for a second month.

Meanwhile, sales dropped at building material & garden equipment supplies dealers, clothing and accessories stores and sporting goods hobby, books and music.

Retail trade sales increased 0.6% from February and 4.7% from past year. Sales at restaurants and bars gained 0.4 percent.

While the stock market volatility has not yet impacted on consumer spending, it is chipping away at business confidence.

The National Association of Home Builders/Wells Fargo builder sentiment index for April, released Monday, fell one point to 69.

"This month's decline in the Empire State six-month forward index may reflect trade-related uncertainties and the associated volatility of stocks, or other factors", said Roiana Reid, an economist at Berenberg Capital Markets in NY.

Other reports by Click Lancashire

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