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Retailer's delight, but for how long?

Bareksa15 April 2014
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Retailer's delight, but for how long?
March retail sales in the U.S. saw their biggest monthly gain in a year and a half. But economists are divided on what the figures signify on the outlook ahead. - (Reuters/Jamali)

The 1.1 percent increase in last month's retail sales was driven in part by the auto sector

Reuters - As the snow melts, retail sales heat up. March saw a big boost in U.S. retail sales - the largest gain in a year and a half, according to the Commerce Department. The results confirmed what many analysts have been saying for months: that frigid temperatures in many parts of the country kept shoppers away from the cash register. The 1.1 percent increase in last month's retail sales was driven in part by the auto sector, also experiencing its largest surge in 18 months. But the positive results applied across the board: from clothing to restaurants to building materials and February's sales number were revised higher. Niemira says the news help provide momentum for the broader economy to make up for a weak first quarter. But economist Robert Brusca isn't so sure. While the March bounce-back was bigger than he was expecting, he says there is still a lot of drag on this economy. After hitting record highs, the S&P 500 is now down one and a half percent so far this year. Consumer spending accounts for about two thirds of economic activity - so while pent-up demand might make March's numbers look especially strong, the fundamentals aren't as strong as Brusca would like.That, coupled with stagnant employment and personal incomes, could mean the motivation to spend stays relatively low - even as temperatures move higher.

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