The US retail sales increased in March for the first time since November last year as the consumers rose their purchases of automobiles and other items, indicating that a sluggish economic growth in the first quarter was temporary.
The US Commerce Department report, which was released on Tuesday, and other government data showed that the producer inflation slithered last month should continue keeping the Federal Reserve Bank on track to commence hiking the rates of interest later this year.
An unusually harsh winter had undercut the economic activity early this year. The other major reasons that had contributed in hurting the country’s economy include a stronger dollar, a recently settled labor dispute at West Coast ports, lower crude oil price and softer global demand.
Markit chief economist Chris Williamson said, “A rebound in retail sales last month provides evidence that the American economy is pulling out of a soft patch seen at the beginning of the year. The improvement in retail sales … adds to the likelihood of policymakers voting to hike interest rates this year.”
The sale in the retail sector rose 0.9 percent last month, falling in line with the economists’ expectations. This was the largest gain recorded since March 2014 and snapped three consecutive months of drops that had been blamed on harsh winters.
The sales rebound, which was majorly driven by clothing, furniture, automobiles, restaurants and bars and building materials, was even more encouraging due to the major step back in job growth in March.
The retail sales, excluding gasoline, automobiles, food services and building materials increased 0.3 percent after declining 0.2 percent in February.
The stocks at the Wall Street traded marginally higher, with banking majors Wells Fargo & Co and JPMorgan Chase & Co reporting an unexpected strong earnings but Johnson & Johnson declaring that it was slashing its forecast for full-year earnings because of the impact of the buoyant greenback.
The prices for the government debt increased, while the US dollar emerged weaker against a basket of global currencies.