(April 1): US retail sales rebounded by more than forecast in February in a broad advance as consumers stepped up spending after a slow start to the year.
The value of retail purchases increased 0.6% after a slight decline in January, helped by resurgent auto sales. Excluding motor vehicles and gas, sales rose 0.4%, the most since August, according to Commerce Department data out on Wednesday. The figures aren’t adjusted for inflation.
Ten out of 13 categories posted increases, including personal care, clothing and sporting goods and hobby stores. Motor vehicle sales rose 1.2%, the most since July, after severe winter weather crimped demand a month earlier. A pickup in receipts at gas stations likely reflected higher pump prices that accelerated in March because of the Iran war.
The retail figures indicate consumer demand was holding up ahead of the Iran war, helped by wage growth that is outpacing inflation and larger tax refunds. A Bank of America Institute analysis of internal card data suggested refunds helped bolster discretionary purchases by lower-income consumers in February.
| Metric | Actual | Estimate |
|---|---|---|
| Retail sales (MoM) | +0.6% | +0.5% |
| Sales ex. autos, gas (MoM) | +0.4% | +0.3% |
| ‘Control group’ sales (MoM) | +0.5% | +0.3% |
Still, the war in Middle East has driven gasoline prices above US$4 a gallon, which risks causing shoppers to adjust their spending in other areas if the conflict drags on.
See also: US companies add 62,000 jobs, led by healthcare, says ADP
Spending at restaurants and bars, the only service-sector category in the retail report, rebounded 0.4% after declining in the prior month.
The retail sales data showed so-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — increased 0.5%, the most since October. The measure excludes food services, auto dealers, building materials stores and gasoline stations.
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Meanwhile, separate figures out on Wednesday showed companies added 62,000 jobs in March after a similar increase a month earlier, indicating a steady labor market.
The ADP Research data precede the government’s March jobs report out on Friday. Economists project payrolls rebounded last month after one of the largest declines since the pandemic.
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