Retail sales rebound in March
Strong auto sales helped spur overall results last month; sales excluding autos weaker than expected.
By Parija Bhatnagar, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - Retail sales rebounded moderately in March from a poor showing in the previous month, helped mostly by a pick-up in automobile purchases, the government said Thursday.

The Census Bureau report reported a 0.6 percent in retail sales last month, compared with a revised 0.8 percent drop in February. Total sales in February were initially reported to have dropped 1.4 percent.

Economists surveyed by Briefing.com had forecast a 0.5 percent gain for the month.

Excluding volatile auto sales, sales rose just 0.4 percent in March versus a revised 0.3 percent drop in February. But the number fell shy of economists forecast for a 0.5 percent gain. Sales, ex-auto, were originally reported to have fallen 0.6 percent.

According to the report, car sales jumped 1.6 percent in March, rebounding from a 2.8 percent drop in February.

Among the other strong performing categories, furniture and home furnishing stores logged a 0.5 percent gain in the month, sales of building materials jumped 1.2 percent and sales at sporting good, music and book stores increased 0.6 percent.

However, a calendar shift that pushed the Easter holiday into April this year versus March last year most likely hurt clothing, accessories and gift sales.

The report showed sales at apparel stores were flat for the month, while department store sales slipped 0.1 percent. But electronics stores were the hardest hit in the period, registering a 1.1 percent drop in sales.

UBS economist Jim O'Sullivan said the modest March gains indicate that consumer spending "still looks pretty solid." "The revisions in February were a surprise and helped boost the first quarter average for consumer spending," he said. He now expects a 5.5 percent annualized real consumer spending growth for the first quarter compared to a 0.9 percent increase in the fourth quarter.

At the same time, he added that there were reasons to think consumer spending would start to slow in the coming months particularly as rising interest rates discourage home owners from tapping into their home equity as an additional source of spending income.

Others were less concerned.

Anthony Chan, chief economist with JPMorgan, said optimism about the jobs market was also acting as a spending catalyst, helping to counter the pressure of rising energy prices on consumers' wallets.

"It appears that the general improvement in labor market conditions, as evidenced by the recent decline in the unemployment rate, is currently offsetting the effect of rising energy prices," Chan wrote in an email to CNNMoney.com.

"Additionally, it was quite impressive to learn that the effects of a late Easter failed to depress the overall headline number as much as was expected thereby providing some hope that spending will not slow as much as expected during the second calendar quarter," he said.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.