Sales at U.S. retailers rose less than forecast in March after being depressed by harsh winter weather, signaling consumers are intent on not overextending themselves.
Purchases increased 0.9 percent, the first gain in four months, after a 0.5 percent drop in February, Commerce Department figures showed Tuesday in Washington. The median forecast of 87 economists surveyed by Bloomberg called for a 1.1 percent advance.
The figures show Americans remain focused on shoring up savings even as employment and confidence firm and inflation remains low. A boost in wage growth may be what’s needed to drive households to loosen their purse strings and sustain a pickup in growth after a first-quarter slowdown mainly caused by unusually harsh winter weather.
“We are looking for a bit of a weather recovery,” Gennadiy Goldberg, a strategist at TD Securities LLC in New York, said before the report. “It’s a bit of pent-up demand.”
Estimates for retail sales in the Bloomberg survey ranged from advances of 0.2 percent to 1.7 percent. February’s reading was revised from an initially reported 0.6 percent decrease.
Even though the March increase was smaller than projected, it was the biggest advance in a year.
Another report showed the producer price index rose 0.2 percent in March, matching the median forecast of economists surveyed by Bloomberg, after a 0.5 percent drop the prior month, according to figures from the Labor Department. Over the past 12 months, wholesale costs fell 0.8 percent. The PPI excluding food and fuel also climbed 0.2 percent from a month earlier.
The Commerce Department’s sales report showed demand climbed in nine of 13 major retail categories last month. A rebound in sales at auto dealers paced the increase.
Car purchases climbed 2.7 percent in March, the biggest gain in a year. The auto figures are in line with industry data.
Cars and light trucks sold at a 17.1 million annualized rate in March, matching the strongest pace since August, figures from Ward’s Automotive Group show.
“The first quarter saw a string of mixed economic data,” Emily Kolinski Morris, chief economist at Dearborn, Michigan-based Ford Motor Co., said on an Apr. 1 sales and revenue call. “We expect a firming labor market and still-low fuel prices and interest rates to support renewed momentum in economic activity as spring takes hold.”
Retail sales excluding autos rose 0.4 percent after being little changed in February, today’s report showed. They were projected to rise 0.7 percent, according to the Bloomberg survey median.
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