Shoppers at the Forever 21 store in Redondo Beach. Retail sales last month… (Lawrence K. Ho / Los Angeles…)
WASHINGTON -- Forget high gas prices and stagnant incomes. American consumers are spending like the good times are back.
Retail sales in March far exceeded analysts' forecasts, growing at a strong 0.8% pace after similarly robust gains in the prior two months, the Census Bureau reported Monday.
"Consumers shot the lights out in the first quarter," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York, in a note to clients.
Stocks rose in early trading on the news, but there were some caveats.
Once again, the unseasonably warm winter weather appears to have played a role in the better-than-expected numbers. Spending at home and garden centers last month surged 3% from February, and their sales were up a whopping 14.1% from March 2011. Sales of cars, clothes, electronics and home furnishings also grew robustly over the month.
It remains to be seen how much the burst of spending in the winter will affect retail sales this spring. Weather also probably boosted employment earlier this year, and there was a significant correction in March when job growth slowed sharply.
Sales in the second quarter "will not have the benefit of mild winter weather and accelerating auto sales growth," said analysts at TD Bank. "Plus, we can't ignore the reality of stagnant real income growth."