Sales at U.S. retailers rose in March for a ninth consecutive month, easing concern that the jump in food and fuel costs would cause consumers to retrench.
Purchases increased 0.4 percent following a 1.1 percent February gain that was larger than previously estimated, Commerce Department figures showed today in Washington. A report from the Labor Department showed job openings in February jumped by the most in six years.
Declining unemployment and a cut in payroll taxes for 2011 are helping sustain sales at chains like Macy’s Inc. and Saks Inc. At the same time, mounting gasoline and grocery bills are eroding confidence and straining paychecks, making it likely consumer spending, the biggest part of the economy, cooled in the first quarter from the final three months of 2010.
“The data point to pretty resilient consumer spending,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston. “Although there was concern about the tax that higher gasoline prices are imposing, consumers basically shrugged off those headwinds. We have a better labor market, with job growth.”
The Federal Reserve said the economy grew at a “moderate” pace in February and March, with the job market showing improvement in most regions.
“While many districts described the improvements as only moderate, most districts stated that gains were widespread across sectors,” the central bank said in its Beige Book report.
Stocks rose, with the Standard & Poor’s 500 Index gaining less than 0.1 percent to 1,314.41 at the 4 p.m. close in New York. Treasuries climbed, with the yield on the benchmark 10-year note falling to 3.46 percent from 3.49 percent late yesterday.
The median forecast of 82 economists surveyed by Bloomberg News called for a 0.5 percent rise in retail sales. Economists’ estimates ranged from a drop of 0.5 percent to a 2 percent gain. The Commerce Department also revised up its readings for sales in January and February.
Job openings rose by 352,000 in February, the biggest gain since December 2004, the Labor Department said today. At 3.09 million, the number of positions waiting to be filled was the highest since September 2008.
Another report from the Commerce Department also showed inventories rose 0.5 percent in February after a revised 1 percent gain in January that was larger than initially estimated. The amount of goods on hand at retailers compared to sales dropped to the lowest level on record, indicating merchants will be placing more orders to rebuild stocks, contributing to growth and helping keep manufacturing as the expansion’s frontrunner.
The retail sales report showed 10 of 13 major categories showed gains last month, led by the biggest increase in furniture demand since 2004 and the largest advance in electronics purchases in a year.
Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales rose 0.4 percent after a 1.1 percent increase the prior month that was almost twice as large as previously estimated.
“While it’s early days, this is a strong vote of confidence in favor of consumption being able to withstand the shock of higher gasoline prices,” Jay Feldman, an economist at Credit Suisse in New York, said in an e-mail to clients. “Continued improvement in the labor market is of course key.”
The economy created 216,000 jobs in March, the most since May 2010, while the jobless rate fell for a fourth straight month to a two-year low of 8.8 percent, Labor Department data showed April 1.
Cincinnati-based Macy’s, the second-largest U.S. department-store chain, reported same-store sales rose last month, while analysts forecast a decline. Luxury retailers Saks, Nordstrom Inc. and Neiman Marcus Group Inc. also topped estimates.
Today’s retail sales report also showed the impact of rising gasoline prices. Filling station receipts climbed 2.6 percent, probably propelled by the higher cost of fuel. Purchases aren’t adjusted for inflation.
The cost of regular fuel averaged $3.54 a gallon in March, up from $3.18 the prior month, according to AAA, the nation’s biggest motoring organization. The price jumped to $3.81 a gallon on April 12, the highest since September 2008.
Sales fell 1.7 percent at automobile dealers, today’s report showed. That’s consistent with industrywide light-vehicle sales, which ran at a seasonally adjusted annual rate of 13.1 million in March, down from 13.4 million the prior month, according to researcher Autodata Corp.
Nonetheless, auto demand has improved from last year. Sales at Dearborn, Michigan-based Ford Motor Co. climbed 16 percent in March from the same time in 2010, outpacing Detroit-based General Motors Co.’s 9.6 percent gain.
“We continue to see good, solid signs of progress despite some of the challenges,” Don Johnson, GM’s vice president of U.S. sales operations, said on an April 1 conference call. “A recovering job market is going to be the most important factor for the U.S. economy at this stage, and we do anticipate that this is going to continue to improve.”
Wal-Mart Stores Inc., the world’s biggest retailer, is among chains saying customers are feeling the pinch from rising fuel expenses.
“We still see our customer financially strapped,” Rosalind Brewer, president of the Bentonville, Arkansas-based company’s Wal-Mart East division, said in an investor presentation on April 12. We see the shopper’s “wallet being stretched a lot more.”