- Guy Berger, an economist at RBS Securities Inc
US retail sales remained unchanged last month as households refrained from lavish spending on automobiles and other big-ticket items, pointing to the US economy's struggle to make a strong bounce back after barely growing in the beginning of the year. In March, retail sales rose 1.1%, marking an upward revision from previously reported 0.9% rise. Core retail sales, which exclude automobiles, inched higher by 0.1% in the reported month. Retail sales are a key barometer for overall consumer spending, which makes up around two-thirds of US economic output. During the first quarter, households remained cautious due to bad weather and a broader economic slowdown. The government reported last month that GDP grew at a 0.2% annual pace in the first three months of the year. Trade and wholesale inventory data published last week, however, suggested the economy actually contracted. The government will release its GDP revision later this month.
A pickup in consumer spending would give the Fed confidence that a soft first-quarter economic performance was temporary, rather than a sign of some underlying problems. Other recent economic data suggests the world's number one economy is returning to healthier growth rates. Employers added 223,000 jobs in April, the Labor Department said, a rebound after March's gain of only 85,000, the worst monthly performance in almost three years.
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