Retail sales strength eases growth worries
By Lucia Mutikani
WASHINGTON (Reuters) - Retail sales showed unexpected vigor in March as Americans shrugged off high gasoline prices and bought a range of goods, suggesting economic growth in the first quarter was probably not as weak as many had feared.
Retail sales increased 0.8 percent, the Commerce Department said on Monday, after rising 1.0 percent in February.
Last month's gains, which surpassed economists' expectations for only a 0.3 percent rise, could prompt analysts to raise their forecasts for first-quarter consumer spending, the main driver of the economy.
The economy grew at an annual rate of 3.0 percent rate in the fourth quarter and growth in the Jan-March period was seen at around 2.5 percent.
"It's a clear sign that U.S. consumer spending remains strong. On balance I think it's the latest sign here that the economy is outpacing a lot of its major counterparts in recovery," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
However, the growing optimism over the economy was tempered by a separate report showing that manufacturing in New York state slowed sharply this month as shipments of goods weakened.
Factories, however, hired more workers and received higher prices for their goods, giving the report a mixed tone.
The New York Federal Reserve Bank said on Monday its "Empire State" manufacturing activity index fell in April to 6.56, the lowest reading in five months, from 20.21 in March. Continued...