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Retail Sales Rise Less Than Forecast in March
Sales at U.S. retailers rose less than forecast in March after being depressed by harsh winter weather, signaling consumers are intent on not overextending themselves.
Purchases increased 0.9%, the first gain in four months, after a 0.5% drop in February, Commerce Department figures showed April 14 in Washington. The median forecast of 87 economists surveyed by Bloomberg called for a 1.1% advance.
The figures show Americans remain focused on shoring up savings even as employment and confidence stay firm and inflation remains low. A boost in wage growth may be what's needed to drive households to loosen their purse strings and sustain a pickup in growth after a first-quarter slowdown mainly caused by unusually harsh winter weather.
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Wholesalers Face an Inventory Glut
Sales of durable goods at U.S. distributors in January and February suffered the biggest two-month drop since the recession's last gasp in early 2009, figures from the Commerce Department showed April 9 in Washington.
As demand weakened, stockpiles built up, sending the inventory-to-sales ratio for those long-lasting goods up to an almost six-year high. Metals, machinery and professional equipment such as computers are among the products sitting in warehouses waiting for buyers.
That's an ominous sign for economists such as Michael Englund. Bloated stocks at wholesalers mean more order books at factories may be a bit leaner, which could leave manufacturing in a funk.
Bookings for U.S.-made durable goods declined in three of the four months through February. The Institute for Supply Management's factory index has dropped for five consecutive months, reaching an almost two-year low in March.
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Consumer confidence increased last week to an almost eight-year high as Americans viewed the U.S. economy in a more favorable light and said it was better time to spend.
The Bloomberg Consumer Comfort Index climbed to 47.9 in the period ended April 5, the highest level since May 2007, from 46.2. A measure of buying conditions was the strongest since November 2006, while attitudes about the economy were the brightest in nine weeks.
The pickup in confidence could signal a rebound in demand, fueling an economy that softened in recent months under the strain of harsh winter weather, a strengthening dollar and tepid global growth. Persistent job-market progress and faster wage gains will help to further boost sentiment and spending, which accounts for 70% of the economy.
The sentiment index's "advance is buttressed by other recent indicators, including strong car sales, rising mortgage applications, gains in new- and existing-home sales and a five-month high in manufacturing, even as March jobs data disappointed," said Gary Langer, president of Langer Research Associates LLC in New York, which produces the data for Bloomberg, said in a statement.
The increase in the comfort index from a week earlier was the biggest since the end of January. The gauge remains well above last year's average of 36.7, which was the best since 2007.
The measure of Americans' views on the current state of the economy climbed to 39.5 last week from 37.1 in the prior period, the report showed April 9. The buying climate gauge, which measures whether now is a good time to purchase goods and services, advanced to 43.8 from 41.3.
The index of personal finances rose to 60.5, the second-highest level since October 2007, from 60.1.
A strong trend in job growth has probably helped lift sentiment. While March payrolls growth was the weakest since December 2013, employment gains have averaged 260,670 a month for the past year, according to Labor Department data.
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DOT Freight Transportation Index on the Rise
The Department of Transportation's freight transportation services index rose 2.5% in February from the same month in 2014, DOT said April 8. The freight TSI declined 1.7% from January to a reading of 120.4, dropping for the second consecutive month, DOT's Bureau of Transportation Statistics said in its monthly report. "Unusual winter weather played a role in much of this decline in transportation-related economic activity. Transportation may also have been impacted by labor issues at West Coast ports," DOT said in a statement. The decline in February from the prior month is the second in three months after three months of growth and the lowest since June 2014. February's reading was 2.4% below the all-time high of 123.3 set in November. DOT uses a baseline reading of 100 from the year 2000. The all-time high set in November was revised down to 123.3 from 123.6, and numbers for September and December also were adjusted downward. "A large decline in rail carloads, rail intermodal, coupled with smaller declines in trucking and water resulted in the decline in the overall freight index in February despite an increase in pipeline," DOT said. The freight TSI is a seasonally adjusted monthly index measuring the output of services provided by the for-hire transportation industries, including railroad, air, truck, inland waterways, pipeline and local transit. |
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