- Craig Dismuke, chief economic strategist at Vining Sparks
The world's largest economy will accelerate in the second quarter. This is clear, as the U.S. economy is finally emerging from the weather-induced slumber, with retail sales for March significantly outpacing markets' expectations.
A report from the Census Bureau unveiled sales at American retailers advanced 1.1% last month, outpacing expectations for a 0.8% gain and accelerating from February's revised 0.7% increase. The main contributor to growth was a strong jump in purchases of motor vehicles and parts, as car sales soared 3.1% over the observed period. Car sales represents the largest part of individual retail segment, and even though they are considered to be highly volatile, excluding car sales, retail sales advanced 0.7%. This is the biggest monthly gain in more than a year and almost double the figure expected by economists. Both indicators inched higher for the second consecutive month. In the first quarter American shoppers purchased 2.5% more goods in the comparison with the same period a year earlier. Despite disappointing payrolls figures, stronger retail sales has definitely added to employment, bolstering the case the second quarter growth will be more impressive.
Despite optimistic data, the USD/JPY pair's move above 102-mark was short-lived, suggesting traders are waiting for other confirmations of economic recovery.
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