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No more freezer burn: March retail sales sizzle after frigid winter

U.S. 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 percent 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 percent in February.

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

An employee rings up a customer at the Macy's flagship store in New York.
Ron Antonelli | Bloomberg | Getty Images
An employee rings up a customer at the Macy's flagship store in New York.

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 percent in March.

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

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

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

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

Sales at furniture stores increased 1.0 percent. Receipts at clothing stores climbed 1.0 percent as well. There were also gains in receipts at sporting goods shops, restaurants and nonstore retailers.

--By Reuters

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