It’s official: People are spending their tax refunds. Retail sales have grown for two months in a row.
April retail sales are 2.8 percent higher than they were the same time a year previously, according to the National Retail Federation, which clarified that the statistics exclude spending on cars, gasoline and restaurants.
The growth looks even stronger when viewed as the three-month moving average — it’s up 4.1 percent compared to the same time a year ago. That’s the high end of the range that NRF had estimated.
Retail Sales Growth Is Solid
NRF Chief Economist Jack Kleinhenz said, “Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets. The tax cuts and higher savings levels should help consumers afford the recent surge in gasoline prices. And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”
The biggest areas of growth came from online commerce, which is up 12.2 percent compared to the same time last year.
And the type of products that are selling the most right now happen to be related to home improvement in one way or another: Home furnishings are up 5.8 percent, while building materials and garden supplies are up 5.6 percent compared to a year prior.
Other product categories had much more modest growth. That suggests that consumer spending is just enough to keep the economy growing at a solid pace.
Economists say that these numbers suggest that the U.S. gross domestic product for the second quarter should come in stronger than what the first quarter GDP numbers were.
Interestingly, this is a recurring pattern — second quarter GDP outpacing that of the first quarter.
Readers, how does all of this jibe with your own spending habits — are you hitting the stores more in the spring than you did in the winter?
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