Shoppers are finally going out to spend some money.
After a depressing slowdown, retail sales are deemed to show a quite strong growth. Economists are, in fact, expecting at least a 0.6 percent climb in March, excluding the volatile auto sector (if we include it, the increase would be 1.1 percent).
“The auto sector is the one that has the biggest impact on the index,” said Eugenio Aleman, economist at Wells Fargo.
March will, therefore, see the biggest surge for retail sales after a few months of decline. February saw a modest 0.3 percent of increase, but it didn’t make up for the January disappointing drop of 0.6. In addition, December showed a 0.1 percent decrease in sales.
“The cold weather is a big explanation of why sales did so bad,” said Kim Fraser, economist at BBVA Research. “And in February retail sales did only relatively well.”
But in March the warmer weather will impact sales, especially in mall traffic trends. Some economists are expecting the apparel and outdoor equipment sector to do well. “A transition to a different season and the weather that is changing will push up the sales,” said Fraser.
But, because of the shifting Easter week (from March to April) the sales performance might not be so spectacular. America Apparel Inc. total net sales were $49.6 million for March: a good number, but unchanged from March 2013. “We are encouraged by a rebound in online sales with an increase of 16 percent this year on top of a 24 percent increase last year. Our wholesale business continues to deliver solid growth with an 11 percent increase for the month and a 9 percent increase for the quarter,” stated Dov Charney, company’s chairman and CEO.
Generally, the March economic activity was quite good. The Labor Department reported 192,000 jobs added, the highest numbers in the last few months. But the unemployment remained at 6.7 percent, while economists forecasted 6.6 percent. Moreover, according to the payroll processor Automatic Data Processor (ADP), the private sector employment increased by 191,000 jobs: a big surge compared to the 139,000 added in February.
In addition, consumers’ confidence, which as of the end of march was at 80, in April rose to 82.6, the highest level since last July, signaling that the economy is improving.
“The economy continues to recover, there is no pace, but it is better than nothing,” said Aleman.
But the economy still needs a more speedy recovery.