U.S. retail sales grew strongly in March. Sequentially, retail sales rose 1.6 percent, surpassing strong consensus expectations for a 1 percent gain. The two biggest gainers were gas stations and autos, but even outside of these categories, sales rose 0.9 percent on the month.
Stripping the most volatile components, the retail sales ‘control group’ rose 1 percent sequentially – also surprising expectations for a 0.4 percent gain. Looking into details, sales seemed strongest in categories that had pulled back in prior months. Clothing rose 2 percent, food & beverages rose 1 percent, and miscellaneous rose 1.8 percent.
The solid rebound in consumer spending is reassuring that the weak patch to start the year is behind us. The growth in March gives a strong set up for the second quarter, which is good news because other sectors are looking a slight soft heading into it.
The fundamentals for consumer spending are strong – solid job growth, accelerating wages, and as an added bonus, lower interest rates.
“While the pace of gains are unlikely to match the stimulus-fueled pace of the past year, they will put a solid foundation under economic growth that is likely to average around the 2% mark over the remainder of 2019”, said TD Economics in a research report.
At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 49.6671 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
