U.S. retail sales recorded their largest gain in a year and a half 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% 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% in February.
Economists polled by Reuters had forecast retail sales, advancing 0.8% last month after a previously reported 0.3% gain in February.
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.
Job growth averaged 195,000 per month in February and March. First-time applications for unemployment benefits in early April fell back to their pre-recession level.
That sets up the economy for a pickup in the second quarter, as does a fading of the drag from the expiration of long-term unemployment benefits and cuts to food stamps.
First-quarter gross domestic product growth estimates range as low as a 0.6% annual pace. The economy expanded at a 2.6% rate in the fourth quarter.
Improving household wealth, thanks to a stock market boom, rising house prices and some uptick in wages, is helping to support consumption.
So-called core retail 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% in March.
That followed a revised 0.4% rise in February. Core retail sales had previously been reported to have increased 0.3% 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% pace.
Retail sales last month were buoyed by a 3.1% surge in receipts at automobile and parts dealers. That was the biggest advance since September 2012.
Excluding autos, retail sales were up 0.7% , the biggest increase in a year, after rising 0.3% in February.
