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Monthly retail sales jump by the most in 18 months

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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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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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