In March, U.S. retail sales saw gains by it’s largest margin since September 2017. Sales were up across a wide range of goods with the largest increases at filling stations, and motor vehicles, indicating that economic growth picked up in the first quarter after a slow start.

According to the report from the Commerce Department on Thursday, overall sales in March rose 1.6% after an unrevised 0.2% decrease in February. March’s gains were the largest in a year and a half beating analysts expectations of 0.8% to 1%.

Separately on Thursday, the Labor Department reported filings for unemployment benefits dropped by 5,000 to 192,000 – a 49 year low dating back to 1969.

With March’s gains, retail sales have now erased December’s dive which at the time positioned consumer spending and subsequently the overall economy on a downward trajectory. March’s gains in retail sales could be explained by tax refunds even though refunds were lower than in past years following a revision of the U.S. tax regime in January 2018.

The stronger-than-expected data indicates that consumers may continue to be catalysts for the growth supported by low unemployment, solid wage gains, and the U.S. Federal Reserve’s decision to keep the interest rate steady for the rest of 2019. However this growth is not likely to change the view that the economy will slow later this year as an inventory accumulation weighs down on growth, and the stimulus from a $1.5 trillion tax cut package decreases.

The Data

In March, automobile dealer sales increased by 3.1%, the most since September 2017. Service station sales rose 3.5%, likely due to higher fuel prices.

Sales at clothing stores were up 2%, the most since last May. Food services reported a 0.8% increase, the most since last July.

Online and mail-order retailers grew by 1.2% in March. Restaurants and bars receipts rose 0.8%, the most since last July

Overall, 12 of 13 major retail categories saw gains while sporting goods and hobby stores saw the sole decline.

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