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Apr 14, 9:20 AM EDT

US retail sales up strong 1.1 percent in March


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WASHINGTON (AP) -- U.S. retail sales in March rose by the largest amount in 18 months, led by strong gains in sales of autos, furniture and a number of other products.

The 1.1 percent jump reported by the Commerce Department on Monday was the best showing since September 2012. The government also revised February to a 0.7 percent gain, more than double its previous estimate.

Sales had fallen in January and December.

Sales of autos climbed 3.1 percent while sales at general merchandise stores, a category that covers retailers such as Wal-Mart and Target and department stores, increased 1.9 percent, the strongest one-month gain since March 2007, before the country fell into recession.

The strong March gain provides more evidence that the economy is emerging from a harsh winter with some momentum.

Economists believe that warmer weather will encourage people to make purchases that they had not during a wave of winter storms. Consumers account for 70 percent of U.S. economic activity, so spending on that front is critical in fueling a stronger recovery.

"Rising wealth, shrinking debt burdens and improving labor markets are helping American shoppers shake off the winter blahs," said Sal Guatieri, senior economist at BMO Capital Markets.

Guatieri said he believed overall economic growth slowed to a 1.2 percent annual rate in the January-March quarter but will rebound to growth of 3.3 percent in the second quarter.

Many analysts believe a strong rebound in the current quarter will last through the rest of the year with growth averaging around 3 percent in the second half of 2014.

For March, sales in a core category of products that feed into the government's calculations of overall growth rose by 0.9 percent, more than double the 0.5 percent gain in February.

In addition to the strong showing for auto dealers and general merchandise stores, sales increased by solid amounts at furniture stores, hardware stores and clothing stores.

Stronger growth is expected to translate into more hiring and an improving labor market.

In March, the economy reached a milestone that was a long time coming. All of the private-sector jobs lost during the recession were recovered. Private businesses shed 8.8 million jobs during the 2007-2009 economic downturn. With the March gains, they have now hired 8.9 million workers. Government jobs are still below prerecession levels.

In March, employers added 192,000 jobs, just below February's gain of 1972,000 jobs. Going forward, some economists believe the stronger economy will lift average monthly job gains to around 225,000. That will mean more income earners and more consumer spending.

A more optimistic outlook for this year in which the economy gains momentum is the reason that the Federal Reserve has been trimming its monthly bond purchases and is expected to keep doing so throughout 2014. The bond purchases were designed to keep long-term interest rates low to give the economy a boost. But with the economy gaining strength, Fed officials have come to believe that the level of government support should be removed gradually.

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