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US Retail Sales Rise for First Time in 4 Months

US retail sales rose less than forecast last month, although the increase was big enough to raise optimism about the consumer-led recovery following a harsh winter season.

Retail sales increased 0.9 percent to a seasonally adjusted $441.4 billion in March, the Commerce Department reported on Tuesday. That was the biggest single-month gain in a year, but was slightly below forecasts calling for a 1.1 percent increase.

Compared to March 2014, retail sales were up 1.3 percent, official data showed.

March was also the first time in four months retail receipts had increased. Retail sales declined 0.5 percent in February and 0.6 percent in January.

Nine of the 13 retail sub-sectors reported growth last month, led by automobile sales. Motor vehicle and parts dealers reported a 2.7 percent increase from February.

Sales at building material and garden equipment stores advanced 2.1 percent in March, while sales at clothing and accessory stores climbed 1.2 percent.

Gas station sales declined 0.6 percent, while food and beverage stores reported a 0.5 percent drop.

Consumer spending, which accounts for more than two-third of economic activity, is forecast to grow in the first quarter, albeit at a slower rate than the previous quarter. Household consumption expanded at an annual rate of 4.2 percent in Q4 of 2014.

The Federal Reserve expects consumer spending to expand “at a good clip this year,” according to Chairwoman Janet Yellen. She added that “strong employment gains, boosts to real incomes from lower energy prices, continued increases in household wealth and a relatively high level of consumer confidence” will support household spending, despite a disappointing first quarter.

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