In another sign consumer spending was rebounding, the Commerce Department reported Wednesday, April 14, that retail sales increased for a third consecutive month in March. The Commerce Department said sales rose 1.6% last month, up from February’s gain of 0.5%.
The increases were across the board, with auto sales leading the way with a 6.7% gain over February. Excluding auto sales, retail sales rose 0.6% in March. Sales in March were 7.6% higher than the same month in 2009. Coupled with a record jump reported last week in same-store sales, signs were clear that American consumers had opened their wallets again.
But some analysts doubt the spending surge will last because momentum from Easter sales, which ended April 4, will not carry into the rest of the month.
Chandi Neubauer, retail analyst at Majestic Research, which is based in New York, said, “I’m a little down on April. There’s a good chance the numbers will disappoint next month.”
In a separate report on Wednesday, the Labor Department said the Consumer Price Index inched up 0.1% in March, mainly due to a large rise in the costs of fresh fruits and vegetables. Core inflation, which excludes the volatile food and energy sector, was flat last month.
In more good economic news, the Commerce Department reported Thursday that business inventories jumped 0.5%, the largest increase since July 2008. While that added to the list of upbeat reports, it does reflect the stark contrast over last year, when businesses let inventories drop sharply as the economy plummeted.
“Last year was the year of super-lean inventories,” Neubauer said, “and this year they should be building more inventories because everyone’s expecting big sales to be generated this year.”
Read the full retail sales report released by the Commerce Department.
Read the story on same-store sales from the archives of InvestmentAdvisor.com.