US Retail Sales UP on Trump Tax Cuts, Consumer Spending Strengthens
US retail sales rebounded in March after 3 straight monthly decliners as households boosted purchases of motor vehicles and other big-ticket items, suggesting consumer spending was heading into Q-2 with momentum.
Fears of a trade war between China and the United States have roiled financial markets.
Consumers are doing their part to drive the economy forward as they restart their engines from a cold and snowy winter.
Economists polled by Reuters had forecast retail sales rising 0.4% in March. Retail sales in March increased 4.5% from a year ago.
“The large swing in consumption between February and March is consistent with an important role for household after-tax incomes being restrained and then lifted by a unique pattern of tax refunds and withholdings,” said an economist at JPMorgan in New York.
“We believe those forces will remain supportive for consumption in the second quarter, and after today’s number remain comfortable with prospects for a rebound in household outlays this Quarter.”
Consumer spending, which accounts about 70% of US economic activity, grew at a robust 4.0% annualized rate in Q-4. It is expected to have slowed to below a 1.5% rate of increase in Q-1 Y 2018.