Consumer discretionary and retail-related exchange traded funds are making a robust rebound as the improving labor market helped bring retail sales to a five month high.
The Commerce Department revealed that retail sales increased a better-than-expected 1.1% in February following a 0.6% rise in January, with sales improving in 11 of 13 categories, including auto dealers and clothing stores, reports Shobhana Chandra for Bloomberg. [ETFs for a Rebound in Consumer Spending]
“There are a number of factors that are helping release this pent-up demand,” Don Johnson, vice president of GM’s U.S. sales, said in the report. “They include stronger employment, good credit availability, and both of those are leading to improving consumer sentiment.”
The sales numbers look promising as employment growth is expanding at a six-month streak, despite any potentially dampening affects from higher energy prices.
Consumers are “unfazed by higher gas prices,” Jonathan Basile, an economist at Credit Suisse, said in the report. “This is a pleasant surprise on the overall picture for the economy. For the Fed, it’s steady as she goes. They will be encouraged, but there is still a long way to go.”