U.S. retail spending rose for the third straight month in March, suggesting that consumers have increasing confidence in the economy and their own financial prospects. Retail sales increased 0.8 percent last month. That follows gains of 0.7 percent in January and 1.0 percent in February. Since consumer spending accounts for about 70 percent of the U.S. economy, the increase, coupled with positive reports on trade and inventories, indicates positive momentum for the quarter and beyond.
March's retail sales totaled $411.1 billion, 24 percent higher than the same month in recession-rocked 2009. Growth was reported by traditional and on-line retailers in every category except one. Autos, appliances, electronics, apparel and building material posted the largest gains. Merchants responded by restocking inventories, rather than letting them run low. Obviously, they believe sales will remain robust in coming months. Such optimism is well-founded.
March growth, as was the case earlier in the year, was geographically broad-based. Retail sales in the Chattanooga and Cleveland, Tenn., metro areas, for example, increased by double digits in January and February. Moreover, the steady growth in sales occurred even as increases in the price of gas caused drivers to spend more at the pump. Consumers, buoyed by continued increases in U.S. hiring and other positive news that means more disposable income for many families, continued to spend on other things, as well.
That does not mean that retailers and consumers have become overconfident. Difficulties in the housing market - though sales and starts continue to exhibit strength - and uncertainties about the role an abnormally warm winter had on shopping patterns have stirred concern. Generally, though, retailers still expect strong sales to continue, barring some unforeseen issue.
The housing market, many say, is not a new problem, though it remains a formidable one. It has been a drag on sales since George W. Bush was in office and administration policies led to the bubble that torpedoed the U.S. economy. The retail marketplace, though, mostly has adjusted to the fallout from the debacle, and likely will continue to cope positively with the drag on sales tied directly to housing. How the market copes with the weather patterns is unknown.
Some believe shoppers came out early this year and spent money that usually isn't injected into the marketplace until later in the year. If that's true, retail sales could dip somewhat in the next couple of months. So far, though, the consensus is that the rate of retail sales gains might slow as a result, but that the upward trend will continue.
Partisan naysayers shrilly proclaim that the course charted by the Obama administration is all wrong. The truth is quite the opposite. As continuing retail growth and an improving economy indicate, the nation's prospects are far brighter now than when George W. Bush last lived in the White House.