Job market pushes up retail sales in March
Posted: 1:21 pm Mon, April 16, 2012
WASHINGTON — Americans bought more electronics, started more home improvement projects and updated their wardrobes last month, inspired by warmer weather and a healthier job market.
Retail sales rose 0.8 percent in March, the Commerce Department said Monday. The gain capped a strong quarter for retail spending, which is contributing to a brighter outlook among economists for growth in the January-March quarter.
Businesses are responding to the higher sales by restocking their shelves at a steady pace, a sign that they expect the trend to carry over into the spring.
More retail spending also helped offset a decline in confidence among homebuilders. And it could ease concerns about March hiring, which slowed to half the pace of the previous three months.
“Retail sales soared in March with stores in just about every category recording sharp increases over February levels,” said Joel Naroff, chief economist at Naroff Economic Advisors. “And let’s not forget, the February spending was strong.”
The retail sales report is the government’s first look at consumer spending each month.
Americans are spending more despite paying higher gas prices and seeing little growth in their wages.
Shoppers bought more furniture, groceries, clothes and sporting goods last month. They also paid more for gas.
Still, excluding cars, gas and food, sales rose 8.2 percent in the first quarter, the most in two years.
The gain pushed total retail sales to a record high of $411.1 billion, 24 percent higher than when the recession low hit in March 2009.
“This is a good report,” said Chris Christopher, an economist at IHS Global Insight. “Consumers are spending despite feeling the pump price pinch.”
Other recent data suggest stronger growth in the January-March quarter.
Business stockpiles rose a seasonally adjusted 0.6 percent in February, the Commerce Department said in a separate report Monday.
Larger stockpiles require businesses to order more goods. That leads to more factory production, which boosts growth.
And overall sales — which include wholesalers and manufacturers as well as retailers — grew 0.7 percent, more than inventories. That’s a good sign because it is evidence that companies aren’t building too much inventory, which can lead to production cutbacks.
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