Washington, DC, Apr. 11--U.S. retail sales rebounded with surprising strength in March, posting their strongest showing since the fall of 2001, according to the Commerce Department.
Retail purchases jumped 2.1% in the month, well above Wall Street analysts' expectations and the biggest monthly gain since October 2001, when sales were recovering after the September 11 attacks.
March sales excluding autos rose 1.1%. February's sales slide was revised to a less severe 1.3% from the previously reported 1.6%. Sales of furniture and home furnishings did better than most, rising 1.5% after a disastrous February.
Analysts had expected sales to bounce back from the drop in February, but the size of the gain was unexpected. Economists had projected overall retail sales to climb 0.6%, and sales excluding autos to advance 0.4%.
"It may suggest some momentum may be building as we get into April," said Patrick Fearon, an economist with A.G. Edwards & Sons in St. Louis.
Uncertainty generated by the war in Iraq, along with its related 24-hour TV coverage, has taken a toll on some retailers. On Thursday, the nation's largest retailer, Wal-Mart, said sales at its stores open at least a year were up only 0.7% in March, the worst monthly performance since December 2000.
"This is good news for the economy," said Tim O'Neill, chief economist, BMO Financial Group in Toronto.
March auto sales advanced 5.3%, their biggest increase since last December. Building material sales surged a record 7.9%, more than making up for a 5.8% fall in snowbound February.
Retail sales make up a substantial portion of overall consumer spending, which accounts for two thirds of U.S. economic activity. With hiring stalling in recent months, economists have been waiting to see if consumers would respond by tightening their purse strings, putting more pressure on an already fragile U.S. economy.
Elsewhere in the March report, apparel purchases were up 1.1%. Gasoline station sales fell 0.3%, confounding analysts' expectations that they would rise to reflect the increase in prices in the run-up to the Iraq war.
