WASHINGTON – U.S. retail sales (search) turned in their strongest showing in seven months in April, rising 1.4 percent in a broad-based gain that doubled expectations and may further dispel fears of an economic soft spot.
The Commerce Department (search) said on Thursday the increase — which topped economists' expectations for a 0.7 percent climb — was the largest since September.
It revised up March's numbers slightly to a 0.4 percent increase from a previously reported 0.3 percent rise and lifted February's number to an advance of 0.7 percent from 0.5 percent.
Excluding autos, which can swing sharply from month to month, the Commerce Department said retail sales climbed 1.1 percent and versus 0.2 percent in March. Wall Street had expected a 0.6 percent rise in April.
Until last week's unexpectedly strong April employment report, economists had been wary that U.S. growth had been hit by high oil prices.
The retail sales number is likely to be seen as a sign consumer spending (search), which drives two-thirds of U.S. output, was faring well at the start of the second quarter.
Economic growth in the first three months of the year slowed to a disappointing 3.1 percent. But fears of a soft spot have retreated after April's payrolls data, which showed employers hired 274,000 new workers last month.
Strong retail sales will be seen as another piece of evidence that the slowdown will not prove lasting.
Motor vehicle and parts sales gained 2.5 percent while sales at clothing and clothing accessories stores advanced 2.8 percent, the biggest rise since October 2002.
Building material and furniture sales also delivered a solid 1.2 percent improvement. The U.S. housing market has been exceptionally strong thanks to low borrowing costs.