March Retail Sales See Boost

Last month, U.S. retail sales increased more than expected thanks to a surge in online retail transactions, reports Reuters. The news shows promise that the economy landed with a strong finish to the first quarter.

The report from the Commerce Department regarding March's strong performance prompted economists at Morgan Stanley to raise their gross domestic product growth estimate for the first quarter to a 2.7 percent annualized rate from a 2.4 percent pace.

"The continued resilience of consumption is another reason to suspect the Fed will wait longer before starting to cut interest rates, which now we think won't happen until September," said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

Retail sales rose 0.7 percent last month, the Commerce Department's Census Bureau said. Data for February was revised higher to show sales rebounding 0.9 percent instead of the previously reported 0.6 percent.

Bank of America credit card data also shows that lower-income spending continues to outpace higher-income spending, according to the report.

"An important reason is that, although lower-income consumers have been disproportionately affected by inflation, they have also been the biggest beneficiaries of the robust labor market," indicated economists at Bank of America Securities. "Lower-income workers have seen the largest cumulative wage gains since the start of the pandemic." Full Story (Subscription Required)