March US sales boost signals more optimism

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With auto sales rebounding strongly, the Commerce Department released a report on Monday showing retail sales in the US increased by more than anticipated in the month of March. 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. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have risen 0.1 percent in February. Retail sales in March increased 4.5 percent from a year ago. The organization said that the three-month moving average for the first quarter increased 4.8% annually, with total 2018 retail sales estimated to see an annual gain between 3.8%-to-4.4%.

Economists saw a limited impact on retail sales for now from a recent ebb in consumer sentiment, citing a robust labour market, which is steadily pushing up wage growth.

Retail trade sales were up 0.6% from February 2018, and 4.7% above past year. Sales also dropped at gasoline stations, but rose modest on a year-on-year basis by 10 percent.

"We remain upbeat for the coming months", he added. It is expected to have slowed to below a 1.5 percent rate of increase in the first quarter.

Clothing and clothing accessory stores were up 6.1 percent year-over-year but down 0.8 percent from February seasonally adjusted.

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Sales at home furnishing stores rose 0.7 per cent, and were up 0.5 per cent at electronics stores. Sales at restaurants and bars gained 0.4 percent.

Sporting goods stores were down 0.9% year-over-year and down 1.8% from February seasonally adjusted.

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

"This is a healthy spending report despite market volatility, unseasonable weather and to uncertain economic policies", said NRF chief economist Jack Kleinhenz.

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