Retail sales rebound in sign consumer weakness fading

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With auto sales rebounding strongly, the Commerce Department released a report on Monday showing retail sales in the USA increased by more than anticipated in the month of March.

March furniture and home furnishings stores sales increased 3.9% from the same month past year, trailing the 4.7% growth for the broad retail sector, the government reported Monday. Without auto sales, the total retail sales gain for the month was 0.2 percent. The results reinforce a Federal Reserve prediction that the declines were transitory, following increased spending after two hurricanes that struck the United States a year ago.

NRF reported a 0.3% annual gain on a seasonally-adjusted basis from February to March, with annual retail sales in March up 5%.

Eight of 13 major retail categories showed increases. It came in slightly above market projections of a rise of 0.4 percent. Non-store retailers - primarily e-commerce and catalog businesses - and gas stations tied for the best gain, each with sales up 9.7% from March a year ago.

Economists largely blame the weakness in retail sales at the start of the year on delays in processing tax refunds.

Consumers shook off stormy weather last month to deliver retail sales growth.

Even with the bounceback, consumer spending probably expanded at a slower pace in the first quarter. Some also argue that income tax cuts, which came into effect in January, only reflected on most workers' paychecks in late February.

A solid March result helps in setting the second quarter up for a healthy rebound with consumer spending expected to expand by around 3 percent, stated TD Economics. The numbers exclude automobiles, gasoline stations and restaurants. Gas-station sales dropped 0.3 percent, the most since July, according to the Commerce report.

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