Retailers’ thaw from winter chill to boost U.S. economy

WASHINGTON – American retailers warmed up in March as the winter chill faded— and it wasn’t just car dealers who benefited.

Sales jumped a greater-than-forecast 1.1 percent, the biggest gain since September 2012, following a 0.7 percent advance in February that was more than twice as large as previously reported, Commerce Department figures showed Monday in Washington. Ten of 13 categories, from auto dealers to furniture and clothing stores, showed a pickup.

More seasonable temperatures brought out shoppers who had holed up at the start of the year, unleashing demand delayed by the snow storms that blanketed much of the country. While the surge in sales came too late to boost economic growth in the first quarter, it will probably propel a marked rebound from April through June.

“It really is a story of pent-up demand,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit and the best sales forecaster in the past two years, according to data compiled by Bloomberg. “As employment levels continue to improve at a modest pace, so too should consumer spending.”

The median forecast of 78 economists surveyed by Bloomberg called for a 0.9 percent increase in total sales. Estimates ranged from a 0.1 percent drop to a 1.5 percent gain after a previously reported 0.3 percent increase in February.

The sales figures used to calculate gross domestic product, which exclude categories such as auto dealers and gasoline stations among others, showed a 0.8 percent increase, the biggest since January 2013, after a 0.4 percent advance in February. While the gain is probably not enough to lift first- quarter growth, it provides a good starting point for this quarter.

After Monday’s report, economists at Morgan Stanley in New York projected the economy expanded at a 1.2 percent annualized rate in the first quarter, followed by an acceleration to around 3.5 percent from April through June.

Excluding declining receipts at gasoline stations, retail sales jumped 1.4 percent last month, the most since March 2010.

The increase last month was led by the biggest gain in motor vehicle purchases since September 2012. Sales at department and general merchandise stores, which include merchants such as Wal-Mart Stores jumped 1.9 percent, the most since March 2007.

After winter weather slowed sales at Wal-Mart in the first two weeks of the fiscal first quarter that began in February, things are starting to look up, Charles Holley, chief financial officer for the world’s largest retailer, said at a March 11 industry conference. “Since that time, we’ve experienced very good sales,” Holley said. “It’s amazing what a little sunshine can do.”

Sales at automobile dealers climbed 3.1 percent after rising 2.5 percent in February, Monday’s figures show.

As the weather warmed in March, auto dealerships became busier as Americans also took advantage of generous incentives. Cars and light trucks sold in March at a 16.3 million annualized rate, the fastest since May 2007, following a 15.3 million pace the prior month, according to data from Ward’s Automotive Group.

Purchases at General Motors, Ford, Toyota, Nissan and Chrysler all topped analysts’ estimates.

“It was very encouraging to see the momentum continue to build as the month progressed,” Erich Merkle, a U.S. sales analyst at Dearborn, Michigan-based Ford, said on an April 1 conference call. “Is there more out there? I guess we’ll see when the market comes to us in April.”

A 0.7 percent gain in retail sales excluding autos was the biggest in more than a year after a 0.3 percent increase in February, Monday’s data showed.

In addition to gains at department stores and car dealers, consumers spent more at furniture, building-supply and sporting- goods outlets. Internet sales also picked up and Americans dined out more, Monday’s figures showed.

An improving labor market will help make it easier for consumers to boost their spending. Payrolls grew by 192,000 in March after a gain of 197,000 in the previous month that was bigger than initially reported, Labor Department figures showed earlier this month.

The gains followed two months of weather-depressed jobs and spending data that clouded the outlook for the economy.

Talk to us

More in Herald Business Journal

County lost 100 aerospace manufacturing jobs in June

At 6.1%, Snohomish County has the sixth-highest unemployment rate in Washington.

The growing business district along 172nd Street NE in Arlington, looking west toward I-5. At lower left is the construction site of the new Amazon fulfillment center. (Chuck Taylor / The Herald)
Marysville-Arlington road improvements won’t happen at once

Traffic improvement projects near the Cascade Industrial Center will take shape over the next decade.

A line of Southwest Air Boeing 737 jets are parked near the company's production plant while being stored at Paine Field Friday, April 23, 2021, in Everett, Wash. Boeing reported its first quarterly profit since 2019 and revenue topped expectations, as the giant aircraft maker tries to dig out from the most difficult stretch in its history. Boeing said Wednesday, July 28, 2021, that it earned $567 million in the second quarter, compared with a $2.4 billion loss a year ago. (AP Photo/Elaine Thompson)
Boeing, for first time since 2019, has a profitable quarter

The earnings hint at a potential turnaround after one of the worst financial crises in the company’s history.

FILE - In this June 18, 2015, file photo, an Airbus A380 takes off for its demonstration flight at the Paris Air Show in Le Bourget airport, north of Paris. European planemaker Airbus reports that it made 1.87 billion euros profit in the second quarter. That's a relief after a loss in the same quarter a year ago during the depths of the pandemic shutdowns and travel restrictions. (AP Photo/Francois Mori, File)
Airbus, Boeing rivalry is back on as sales campaigns pick up

The improving outlook comes amid a travel reopening that’s gathering pace in some key markets.

Festive seafood specialties, modern delicacies with a beautiful presentation on the plate. Delicious dish - tender fish meat, with greens, lemon and vegetables. Cartoon vector.
You voted: The best seafood in Snohomish County

Even during a pandemic, people have their favorites

File - In this Sept. 24, 2014 file photo, smoke hangs over Reno-Tahoe International Airport as a plane takes off in Reno, Nev. A shortage of jet fuel, coupled with supply chain issues and an urgent demand from firefighting aircraft, continues to cause problems at airports around the West. In Nevada, state and federal lawmakers said they are investigating a possible shortage of jet fuel that could delay cargo delivery and passenger travel at Reno-Tahoe International Airport in the coming days. (AP Photo/Martha Irvine, File)
Airports in the US West dealing with shortage of jet fuel

Supply chain issues and an urgent demand from firefighting aircraft have combined to cause problems.

sandwich with ham, tomatoes, lettuce and toast isolated on white background, healthy breakfast, lunch
You voted: The best darn sandwich in Snohomish County

Even during a pandemic, people have their favorites

FILE - In this Aug. 26, 2019, file photo, Washington Attorney General Bob Ferguson speaks at a news conference in Seattle. Washington state sued Johnson & Johnson on Thursday, Jan. 2, 2020, claiming the company was negligent when it used deceptive marketing to say the drugs were effective for treating pain and were unlikely to cause addiction. The lawsuit filed Thursday says the company that supplies raw materials used to make opiates drove the pharmaceutical industry to recklessly expand the production of the drugs. (AP Photo/Ted S. Warren, File)
Washington AG rejects opioids settlement, wants trial

The proposal would pay Washington about $527.5 million over 18 years if cities and counties opt in.

This photo provided by Blue Origin,   Jeff Bezos, founder of Amazon and space tourism company Blue Origin, exits the  Blue Origin's New Shepard capsule after it parachuted safely down to the launch area with passengers Mark Bezos, Oliver Daemen and Wally Funk, near Van Horn, Texas, Tuesday, July 20, 2021.  (Blue Origin via AP)
Blue Origin’s Bezos reaches space on 1st passenger flight

The Amazon founder is the second billionaire in just over a week to ride his own spacecraft.

The first flight for United Airlines servicing Paine Field taxis to the gate on March 31, 2019. (Kevin Clark / Herald file)
Come October, United Airlines will discontinue flights at Paine Field

The airline is one of two commercial carriers at the Everett airport. United flies to Denver.

Community leaders and officials break ground at the Port of Everett's Norton Terminal at the former Kimberly-Clark mill site along the waterfront Thursday morning in Everett on July 15, 2021. (Kevin Clark / The Herald)
Legacy of pollution makes Everett port project ‘challenging’

The former Kimberly-Clark mill site is nearing the end of a complex cleanup, part of a $36 million terminal project.

FILE - In this Oct. 28, 2020 file photo, a motorcyclist cruises past the Renton, Wash., Boeing plant where 737's are built. Boeing is temporarily lowering its delivery target for the 787 Dreamliner after discovering additional work that will need to be performed on the aircraft. The company said Tuesday, July 13, 2021, that the 787 production rate will temporarily be lower than five per month and will gradually return to that rate. (Ellen M. Banner/The Seattle Times via AP, File)
Boeing cuts production on the 787 to address a new flaw

The problem is on the forward pressure bulkhead, which keeps the plane’s interior pressurized.