Retail sales bounced back in March, the government reported Tuesday, suggesting consumers are putting winter in the rear view mirror and are ready to spend again.
After sliding three consecutive months, retail sales reported by the Commerce Department grew at an annualized rate of 0.9 percent in March. That was the best rate in a year yet a hair under forecasts from mainstream economists, who had expected 1 percent growth or higher.
For retailers, the slight forecast miss was no big deal.
“This is welcome improvement after severe winter weather weighed on retail sales for the last several months,” Jack Kleinhenz, chief economist of the National Retail Federation, said in a statement. “Both the composition and the magnitude of March’s rebound shows that consumers have thawed out of the harsh winter weather and returning to spending habits.
Within the retail numbers, there was reason for optimism. Excluding auto sales, retail sales were up 0.4 percent, 0.5 percent with autos and gasoline were excluded. Sales of motor vehicles and parts also bounced back from winter blues in March, growing at a healthy clip of 2.7 percent. Other sectors that saw big jumps in March were furniture at 1.4 percent, building materials at 2.1 percent and clothing and accessories at 1.2 percent.
On a year-over-year basis, retail sales were up 1.3 percent, a number that was pushed down by the 22 percent plunge in gasoline prices, said economists with PNC Financial Services Group in Pittsburgh. In an analysis of the retail sales report, they pointed to improving fundamentals that are bolstering the consumer. These include more hiring, modest growth in wages and home prices and sinking gasoline prices.
“Consumer balance sheets are in great shape,” they noted. “And there is a great deal of pent-up demand, as consumers are making up for years of restrained spending.”