WASHINGTON • US retail sales rose by more than expected in March in the first gain in three months, suggesting consumer demand regained steam on the back of tax cuts and refunds.
Receipts advanced 0.6% following a 0.1% drop in the previous month, according to Commerce Department figures released yesterday. That compared to the median estimate of economists for a 0.4% increase.
So-called retail control-group sales, which are used to calculate gross domestic product and exclude food services, auto dealers, building-materials stores and petrol stations, gained 0.4%, matching estimates.
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.
The results underscore that the declines from December to February were more of a pause following a post-hurricane spending binge. That supports the US Federal Reserve’s view that such weakness was transitory, as well as the central bank’s outlook for two or three more interest-rate increases this year following a quarter-point hike in March.
“It’s nice to see the bounce-back here — to me it’s just on trend,” Societe Generale senior US economist Omair Sharif said. “If you look at the quarter as a whole, we’re not breaking out from the kind of real spending numbers we’ve seen the last several years.”
Eight of 13 major retail categories showed increases. Sales at health and personal-care stores rose 1.4%, the most in two years. Auto sales rose 2%, the most since September; a report last week showed purchases of cars and light trucks rose to a 17.4 million annualised rate in March, the fastest this year.
Weaker sales categories included building-materials stores, which fell 0.6%; apparel stores, down 0.8%; and sporting goods, hobby, book and music stores, off 1.8%, the most since December, the data showed.
The data yesterday also showed that a decline in petrol costs may have weighed on filling-station receipts. Petrol-station sales dropped 0.3%, the most since July, according to the Commerce report. Excluding automobiles and petrol, sales advanced 0.3% for a second month. — Bloomberg