U.S. retail sales rebounds in March, consumer spending to grow healthily through 2018

U.S retail sales recovered in March, rising 0.6 percent after falling 0.1 percent in the prior month. It came in slightly above market projections of a rise of 0.4 percent. The rise was mainly driven by a 2 percent growth in motor vehicle & parts dealers; however gains were comparatively broad based throughout categories. This was borne out in the ‘control group’ used in calculating GDP, which excludes gasoline, autos, building materials, and food services, and was up a sound 0.4 percent on the month, matching market projections.

Looking into the details, sales for furniture, electronics and appliances, health and personal care, and non-store retailers rose in the month. Sales at non-store retailers grew 9.7 percent year-on-year, led by sound rises in online shopping.

Meanwhile, sales dropped at building material & garden equipment supplies dealers, clothing and accessories stores and sporting goods hobby, books and music. On a year-on-year basis, building material sales rose a sound 5.3 percent year-on-year, and the fall in March probably reflects a give back after post-hurricane rebuilding activity in earlier months, noted TD Economics in a research report. Sales also dropped at gasoline stations, but rose modest on a year-on-year basis by 10 percent.

A solid March result helps in setting the second quarter up for a healthy rebound with consumer spending expected to expand by around 3 percent, stated TD Economics.

“Our latest Quarterly Forecast calls for healthy consumer spending through the remainder of 2018, with growth in the neighborhood of 2.5 percent-3.0 percent annualized”, added TD Economics.

At 16:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -57.0657. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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