Recovery evident in multiple indicators
Retail spending up sharply in March
WASHINGTON – Shoppers and businesses are feeling better about the recovery.
That was the encouraging message from a trio of economic reports Wednesday – and from Federal Reserve Chairman Ben Bernanke, who told lawmakers that the country’s modest rebound is sustainable.
Retail spending rose sharply in March. Consumer inflation remained all but invisible. And businesses boosted their stockpiles in anticipation of higher shopper demand.
Bernanke spoke on the same day that the Fed reported the recovery is spreading to most parts of the country. Merchants are enjoying better sales and factories are boosting production, but companies are still wary of ramping up hiring, the Fed reported. But Bernanke also told Congress that the recovery is not strong enough to shrink the unemployment rate much.
Some economists were surprised by the retail sales gains, especially in light of the current 9.7 percent unemployment rate.
Better weather and auto incentives brought shoppers out in force last month. It was the latest evidence of a gradually strengthening recovery. Sales surged 1.6 percent, the Commerce Department said, up from February’s revised 0.5 percent gain. That was better than most economists had predicted.
Increases were posted across the board. Car dealers, home furnishing stores, building suppliers, sporting goods stores, clothing retailers and general merchandise stores all reported gains. Auto sales surged the most since October.
Separately, the government said consumer prices inched up just 0.1 percent in March.
Businesses also boosted their stockpiles for the second straight month in February. That’s a sign that they expect consumers to keep spending.
The recovery has begun to benefit the largest banks, such as JPMorgan. It reported Wednesday a $3.3 billion first-quarter profit on solid gains in the financial markets.
Economists closely watch retail sales for signs that consumer spending, which fuels about 70 percent of the economy, is recovering. Shoppers cut back sharply and boosted their savings during the Great Recession. Some appear to be spending more freely now.