The Census Bureau reported that retail sales rose strongly in March, up 0.8 percent and building off of solid gains in January and February. Consumer spending was higher across-the-board, with the gains not limited to automotive or gasoline station purchases. When you exclude autos and gas from the analysis, retail sales still increased 0.7 percent, for instance.
Among the sectors with the strongest monthly growth were building materials (up 3 percent), furniture and home furnishings (up 1.1 percent), gasoline stations (up 1.1 percent), motor vehicles and parts (up 0.9 percent) and clothing and accessories (up 0.9 percent). Among the major categories, only miscellaneous store retailers (down 0.8 percent) and health and personal care stores (down 0.2 percent) experienced declines.
In terms of quarterly gains, building material spending has seen the fastest growth in the first quarter of 2012, both relative to the fourth quarter of 2011 (up 5.1 percent) and relative to the first quarter of last year (up 12.5 percent). This is an indication of improvements in the housing market; although, it could also suggest that people are fixing up their existing homes. Good weather is probably a factor in helping to boost these figures. The housing figures will be released tomorrow.
Other sectors with strong growth in the first quarter (relative to the prior quarter) include: miscellaneous store retailers (up 4 percent), furniture and home furnishings (up 3.9 percent), clothing and accessories (up 3.8 percent), gasoline stations (up 3.7 percent) and sporting goods (up 3.5 percent).
Meanwhile, the Census Bureau announced new business inventory figures for February this morning, as well. Total inventories rose 0.6 percent, which was mostly unchanged from the prior two months. Manufacturing has a 0.4 percent gain, below the 0.6 percent increase in January. The largest monthly inventory gains were seen in motor vehicles (up 1.8 percent), building materials (up 1.1 percent) and food and beverage stores (up 0.6 percent). Retail inventories grew 0.6 percent, but when automotive numbers were excluded, they rose just 0.2 percent.
As noted in previous releases, the inventory-to-sales (I/S) ratios remain mostly constant, especially as businesses have done a good job with inventory control. The current I/S ratio for manufacturing is 1.33, which is unchanged from the previous month.
Chad Moutray is chief economist, National Association of Manufacturers.
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