Recent Data Shows Economic Recovery Is Beginning
Retail Sales Surge 9.8% in March
Retail sales, a measure of purchases at stores, online, and in restaurants, jumped 9.8% in March, surpassing economists’ forecasts for growth. The results are the latest sign that the US economy is rebounding thanks to stimulus from the federal government and fewer restrictions on businesses. The increase in retail sales marks the largest monthly gain since May of 2020.
A decline in layoffs and an uptick in factory outputs are also contributing to the spring spending surge. Consumer spending is the biggest driver of economic activity. The strong showing in March is fueling optimism about economic growth this summer.
Retail Sales Surge is Broad Based
The March retail sales gains were led by purchases of sporting equipment, apparel, and food. Restaurants and bars saw a 13.4% increase in sales from February to March and 36% year-over-year growth. Meanwhile, sales of sporting goods increased 23.5% and apparel sales were up 18.3%.
The boom in retail sales comes as consumer confidence in the US hit its highest level since the pandemic began.
Jobless Claims Fall
In addition to better-than-expected retail sales, there were also other encouraging data points released yesterday. The US Labor Department reported 200,000 fewer initial jobless claims last week than the week before. Jobless claims, which are a proxy for layoffs, dropped from 769,000 to 576,000, which is the lowest number of initial jobless claims since March 2020. Meanwhile, industrial production, which measures the output of factories, utilities, and mines, rose 2.7% in March compared to February.
These data points reflect a US economy which is improving after more than a year of pandemic induced downturn. Vaccinations are rolling out, people are going back to work, and consumer spending is increasing. Economists are hopeful that these trends will continue in the months to come.
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