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Retail sales heat up with unseasonably warm weather across nation

Shoppers in March shrugged off higher fuel prices and spent more, the Commerce Department said Monday. Both weather and an improving employment picture are credited with lifting the numbers. 

Associated Press

Shoppers in March shrugged off higher fuel prices and spent more, the Commerce Department said Monday. Both weather and an improving employment picture are credited with lifting the numbers. 

WASHINGTON — A healthier job market and warmer weather encouraged more Americans to shop in March.

U.S. retail sales rose 0.8 percent last month, the Commerce Department said Monday. Some of the increase went to pay higher gas prices. Still, more expensive gas hasn't deterred Americans from spending more on other goods.

Consumers spent more on building materials, autos, electronics, furniture and clothing. Excluding car and gasoline sales, retail sales increased 0.7 percent. And excluding autos, gas, and home supplies, so-called "core" sales rose 0.5 percent in March, matching February's gain.

Joshua Shapiro, an economist at MFR Inc., said retail sales have "picked up considerably" in the first quarter, after a weak December gain. Sales have been bolstered by greater hiring, but also unseasonably warm weather, which has added to clothing and home supply sales.

Shapiro and other economists cautioned that the warmer weather may have moved up some retail spending by consumers, which could lead to weaker retail sales in April and May.

Still, the gain pushed retail sales to a record high of $411.1 billion, 24 percent higher than the recession low hit in March 2009.

The retail sales report is the government's first look each month at consumer spending, which represents well over half of economic activity. The increase, along with other recent positive data on inventories and trade, suggests growth in the January-March quarter could be stronger than first thought.

Economists are estimating growth at an annual rate of between 2.5 percent and 3 percent in the first quarter. That's in line with the 3 percent annual pace in the October-December quarter.

More hiring has helped lower the unemployment rate from 9.1 percent in August to 8.2 percent in March. Still, the stronger hiring hasn't translated into higher salaries. Americans' pay isn't keeping pace with inflation. That, along with higher gas prices, could restrain consumer spending later this year.

.Fast facts

Other economic reports

• The Commerce Department said Monday that business stockpiles rose a seasonally adjusted 0.6 percent. The increase pushed inventories to $1.58 trillion. That's nearly 20 percent above the recent low hit in September 2009, just after the recession ended. Overall sales grew faster than inventories in February, rising 0.7 percent. That's a good sign because it is evidence that companies aren't building too much inventory, which can lead to cutbacks in production in future months.

• The outlook among U.S. homebuilders dimmed in April after six months of rising or steady confidence. The National Association of Home Builders/Wells Fargo said Monday that its builder sentiment index fell this month to 25 from 28. Last month's reading was the highest since June 2007. The housing industry has a long way to go in its slow recovery. Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached that level since April 2006, the peak of the housing boom.

Retail sales heat up with unseasonably warm weather across nation 04/16/12 [Last modified: Monday, April 16, 2012 9:09pm]
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