US retail sales post biggest gain in 1-1/2 years

WASHINGTON (REUTERS) - US retail sales recorded their largest gain in 1-1/2 years in March, in the latest sign the economy was emerging from its weather-induced slumber and on track to accelerate in the second quarter.

The Commerce Department said on Monday retail sales increased 1.1 per cent last month, the biggest rise since September 2012, as receipts rose in nearly all categories.

Retail sales, which account for a third of consumer spending, had risen by a revised 0.7 per cent in February.

Economists polled by Reuters had forecast retail sales, advancing 0.8 per cent last month after a previously reported 0.3 per cent gain in February.

Retail sales added to employment data in suggesting the economy found momentum at the end of the first quarter after an unusually cold and snowy winter disrupted economic activity at the end of 2013 and the beginning of this year.

So-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product, increased 0.8 per cent in March.

That followed a revised 0.4 per cent rise in February. Core retail sales had previously been reported to have increased 0.3 per cent in February.

Despite the two consecutive months of gains, a drop in core sales in January suggests consumer spending will slow down substantially from the fourth quarter's brisk 3.3 per cent pace.

Retail sales last month were buoyed by a 3.1 per cent surge in receipts at automobile and parts dealers. That was the biggest advance since September 2012. Excluding autos, retail sales were up 0.7 per cent, the biggest increase in a year, after rising 0.3 per cent in February.

Sales at building materials and garden equipment stores increased 1.8 per cent, the largest rise in eight months.

Receipts at electronics and appliance stores, however, fell 1.6 per cent. There were also declines in sales at gasoline stations, which fell 1.3 per cent. Excluding gasoline, retail sales rose a solid 1.4 per cent, the biggest rise in four years.

Sales at furniture stores increased 1 per cent. Receipts at clothing stores climbed 1 per cent as well. There were also gains in receipts at sporting goods shops, restaurants and nonstore retailers.