The U.S. economy may be doing better than we think as the improving jobs market is translating to higher consumer confidence. The government released better-than-expected retail sales numbers Monday, lifting retail stocks and sector-related exchange traded funds.
SPDR S&P Retail ETF (NYSEArca: XRT) gained 0.5% on Monday
The Commerce Department announced that retail sales in the U.S. increased 0.8%, compared to the average forecast of 0.3%, following the 1% advance in February, reports Shobhana Chandra for Bloomberg. [Retail ETFs Strengthen as Sales Hit Five-Month High]
Improvements in the jobs market has boosted consumer confidence in spite of rising gas prices. Additionally, the stronger consumer demand will also help the U.S. economy chug through the potential recessions in the Eurozone or a “hard landing” in China.
Households “have the income to propel their purchases now that we’re seeing job growth,” Russell Price, senior economist at Ameriprise Financial, said in the article. “They have adjusted to the higher price of fuel. The economy now needs to build on its own momentum.”
“The industry and consumers have been very resilient in the face of higher pump prices,” Don Johnson, vice president of U.S. sales at General Motors Co., said in the article. “The steadily improving economy is playing a role and so is pent-up demand and an improved credit market.”