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U.S. Retail Sales Show Much Bigger Than Expected Rebound In March

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Retail sales in the U.S. spiked by much more than expected in the month of March, the Commerce Department revealed in a report released on Thursday.

The Commerce Department said retail sales soared by 1.6 percent in March after dipping by 0.2 percent in February. Economists had expected retail sales to climb by 0.9 percent.

The stronger than expected retail sales growth was partly due to a jump in sales by motor vehicle and parts dealers, which skyrocketed by 3.1 percent in March after edging down by 0.1 percent in February.

Excluding sales by motor vehicle and parts dealers, however, retail sales still surged up by 1.2 percent in March following a revised 0.2 percent dip in February.

Ex-auto sales had been expected to increase by 0.7 percent compared to the 0.4 percent drop originally reported for the previous month.

Higher gasoline prices contributed to another spike in sales by gas stations, which soared by 3.5 percent for the second consecutive month.

Nonetheless, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, jumped by 1.0 percent in March after falling by 0.3 percent in February.

Notable increases in sales by clothing and accessories stores, furniture and home furnishings stores, and miscellaneous store retailers contributed to the rebound in core sales.

"Overall, the retail sales figures add to the slightly more positive tone of the recent data and provide some comfort that the economy isn't falling off a cliff," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But they don't change our view that the fading of the fiscal boost and the lagged impact of the Fed's monetary tightening will push GDP growth below its 2% potential pace over the coming quarters."

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