Retail Sales Up a Robust 0.8% During March : Easter Buying Credited for 5th Straight Gain

Retail sales rose a healthy 0.8% in March, the government reported Wednesday, propelled by Easter buying at department and food stores.

The Commerce Department said retail sales for the month increased by a seasonally adjusted $1.1 billion to $130.7 billion.

It was the fifth consecutive monthly increase and the largest since December, when sales shot up 1.1%. Revised figures showed sales rose 0.6% in February and 0.1% in January.

Since the October stock market crash, economists have watched retail sales closely for signs that the consumer sector of the economy would weaken. But more recently, some analysts have raised fears that too much consumer demand could rekindle inflation.

“If consumer spending were sustained at the March pace for several months to come, we would probably be heading (toward) higher inflation and higher interest rates,” said Bruce Steinberg, senior economist with Merrill Lynch Capital Markets. However, he said growth in retail spending will likely slacken in April and May.

“The consumer was feeling good about spending in March, but that doesn’t indicate that a new consumer boom is in the making,” Steinberg said.

Economists had predicted only a 0.2% to 0.3% gain in March. They said Wednesday that because Easter fell on April 3, earlier in the year than usual, more people than usual may have shopped in March for the holiday.

Easter-Related Sales

Sales at department and other general merchandise stores rose 1.6%, after suffering a steep 2.6% drop in February.

Sales at food stores rose 1.1%, following a 0.6% decline the month before.

“The increase at department stores is definitely Easter-related,” said James Newton, an economist with Economic Perspectives Inc., a Delaware, Ohio, consulting firm. He said the increase at food stores “might also be a bit Easter-related.”

March sales increased in all categories except furniture and restaurants, in contrast with the first two months of the year, when overall sales growth was spurred by auto sales.

“The strength in retail sales had been largely in autos,” said Scott Hoyt, an economist with Data Resources Inc., a Lexington, Mass., forecasting firm. “Now we’re seeing it across the board, indicating somewhat broader strength.”

Auto sales rose 0.9% in March. Excluding autos, sales were up 0.8%, the same as the overall rise.

In January and February, car sales were much stronger than other sales. They rose 2.5% and 2%, respectively, while other sales declined 0.6% in January and increased only 0.2% in February.

Sales of all durable goods--items expected to last three or more years--were up 0.5% in March, while non-durable goods were up 1%.

The department offered these details of March sales:

- Hardware and garden supply stores, up 0.5% after soaring 3% in February.

- Furniture and appliance stores, down 2% after a strong 2.9% increase a month earlier.

- Gasoline, up 1.4% following a 1.2% decline.

- Specialty clothing stores, up 0.3%; restaurants and bars, down 0.6%, and drugstores, up 1.6%.