Americans spent on a wide range of goods and services in March for the third straight month, suggesting the U.S. economy grew somewhat faster than expected in the first quarter.
MarketWatch reported that consumers increased spending in virtually every category, whether at online stores or traditional bricks-and-mortar retailers. Automobiles, electronics and appliances, building materials and clothing stores saw the biggest gains.
Retail sales climbed 0.8% in March, the Commerce Department said, following revised increases of 1.0% in February and 0.7% in January. February’s gain was revised down slightly and January was revised up a tick.
Consumer spending accounts for as much as 70% of U.S. economy, so the recent upsurge in spending likely means the nation’s growth in gross domestic product for the first quarter will be faster than expected. Before the latest retail report, economists polled by MarketWatch forecast that quarterly GDP would increase by 2.3%.
While sales at resurgent automobile companies jumped during the first quarter, other retailers also benefited. Sales excluding the U.S. auto sector were still up a sharp 0.8% last month.
Economists surveyed by MarketWatch expected retail sales to rise by 0.4% overall, or by 0.6% excluding the automobile sector.
Spending has been fueled by an acceleration in U.S. hiring since last fall. With more people working, there’s more money to spend. Retailers have also been helped by one of the warmest winters in decades.
Whether consumers can continue to spend at their current pace remains to be seen, however, as inflation-adjusted wages have actually fallen over the past year, and consumers are saving somewhat less.