U.S. March Retail Sales Rebound 0.2%

Gain due to accelerating food prices

After declining sharply in the prior month as consumers appeared to step up spending despite swirling economic pressures, U.S. retail sales rebounded 0.2% in March , a government report showed April 14. Some economists said the gain was partly explained by accelerating food prices, however, which have been stoked higher by rocketing global commodity costs.

Core retail sales, which exclude auto sales, rebounded by 0.1%, the Commerce Department said.

The latest retail sales survey revealed an improved picture compared with February, but analysts say American consumers are still being pinched by the housing slump, a related credit squeeze and surging gasoline prices. "Consumer spending was not as weak as feared, but that is because people are paying a lot more for food and energy. There were strong increases in food and gasoline demand, which is likely just the result of the price spikes in these goods," said Joel Naroff, the president of Naroff Economic Advisors.

Motor vehicle and parts sales rose 0.2% in March, vexing some economists who pointed out that big auto makers reported hefty sales declines last month. General Motors, Ford and Chrysler all reported a double-digit plunge in sales in March compared to the same month a year earlier.

The overall rise in sales last month was supported by gasoline station sales, which rose 1.1%, and Internet retailing, as online retail turnover increased 2.1%. But the lingering housing market downturn seemed to be still weighing on consumers as home furniture store sales declined 0.3% while gardening store sales dropped 0.1%.

Copyright Agence France-Presse, 2008

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