Purchases increased 0.9%, the first gain in four months, after a 0.5% drop in February, Commerce Department figures showed April 14 in Washington. The median forecast of 87 economists surveyed by Bloomberg called for a 1.1% advance.
The figures show Americans remain focused on shoring up savings even as employment and confidence stay firm and inflation remains low. A boost in wage growth may be what’s needed to drive households to loosen their purse strings and sustain a pickup in growth after a first-quarter slowdown mainly caused by unusually harsh winter weather.
“We are looking for a bit of a weather recovery,” Gennadiy Goldberg, a strategist at TD Securities LLC in New York, said before the report. “It’s a bit of pent-up demand.”
Estimates for retail sales in the Bloomberg survey ranged from advances of 0.2% to 1.7%. February’s reading was revised from an initially reported 0.6% decrease.
Even though the March increase was smaller than projected, it was the biggest advance in a year.
The Commerce Department’s sales report showed demand climbed in nine of 13 major retail categories last month. A rebound in sales at auto dealers paced the increase.
Car purchases climbed 2.7% in March, the biggest gain in a year. The auto figures are in line with industry data.
Cars and light trucks sold at a 17.1 million annualized rate in March, matching the strongest pace since August, figures from Ward’s Automotive Group show.
“The first quarter saw a string of mixed economic data,” Emily Kolinski Morris, chief economist at Dearborn, Michigan-based Ford Motor Co., said on an April 14 sales and revenue call. “We expect a firming labor market and still-low fuel prices and interest rates to support renewed momentum in economic activity as spring takes hold.”
Furniture stores, building-material outlets, general merchandise retailers and restaurants were among the categories showing rebounds in demand in March after poor weather hurt sales the prior month.
Consumers are being circumspect in spending the savings from lower fuel costs. The average price of a gallon of regular gasoline was $2.41 a gallon on the last day of March, according to AAA, the biggest U.S. auto group. While higher than the February average of $2.24, it’s still far short of last year’s high of $3.70.