Retail sales show strong gain in March
Posted on April 14th, 2010
() Washington – Consumers appear more confident in the economic recovery based on the recent Commerce Department report on retail sales which rose 1.6% in March, its largest monthly gain in five months. The government data helped boost stocks Wednesday with the Dow trading up nearly 49 points at 11,069.
Economic pundits were looking for a 1.2% increase in retail sales last month, yet the sharper-than-expected increase was tempered by a 0.6% increase when detracting auto sales figures. Forecasts called for retail sales gains, less autos, of 0.5% in March.
Yet March brought in better-than-expected auto sales overall, which gained 6.7%. But even though big-ticket vehicle sales were up, consumer interest in electronics and appliances fell 1.2%.
Fed Chief Ben Bernanke was optimistically cautious towards the U.S. economic recovery telling lawmakers on Capitol Hill that they’d better watch their fiscal responsibility in balancing the federal budget. Bernanke was also concerned with the number of workers that remain on unemployment – some 40% above normal.
Housing remains depressed and likely will continue throughout the next year or two. Some expect housing prices to continue dropping before an all-out recovery is felt, mostly due to the number of homes falling into foreclosure.
The Obama administration has tried to shore up housing, yet part of its current plan is to ask banks to forgive outstanding debt in writing down loans, something shareholders of the nation’s banks object to considering the near-ruin of the major banks had the Treasury not stepped in and offered billions in bailout funding.
But despite the back and forth squabbling between the financial sector and the financial sector, most Americans felt more comfortable in spending cash last month while at the same time businesses have restocked shelves in anticipation of growing demand after having let inventory levels drop as low as possible before reordering occurred. A resurgence in orders from foreign buyers of domestic goods could go a long way towards improving the U.S. economic picture. A report by the government showed that exports rose in February, while imports climbed as well, holding onto a trade gap that has worried economists for some time. Still, indications are that foreign demand for U.S. goods will grow and with it a demand for workers that might add to the level of consumer spending in the second quarter.
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Tags: March, Retail Sales
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