Instant View: Retail sales beat expectations in March

NEW YORK Mon Apr 16, 2012 8:50am EDT

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NEW YORK (Reuters) - U.S. retail sales rose more than expected in March as Americans shrugged off high gasoline prices and bought a range of goods, suggesting that economic growth in the first quarter did not slow as much as many had feared.

NY Fed manufacturing growth slows sharply in April

COMMENTS:

SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES, ST. PETERSBURG, FLORIDA

RETAIL SALES: "The headline number came in better-than-expected, but once you look at the details, it was pretty moderate. We are hanging in here. This is not going to do much to Q1 GDP forecasts.

"The stock market is focusing on the headline number, but it's consistent with what we have been seeing. We are still growing but not as fast as we would like."

N.Y. FED MANUFACTURING: "This was a disappointment. We might get more information from the business inventories later."

TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK

"Retail sales did not change our general outlook on consumption and we expect a modest outcome for the quarter, so this data is largely consistent with that."

"The manufacturing data is the report people will hang onto this morning as it essentially collapsed. This is the first of several regional reports, so clearly we did not start April on good footing."

OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON D.C.

"Kind of mixed data. The Fed Empire State survey was a big mess, but I think the bigger focus is going to be on the retail sales numbers, which across the board were solid numbers, whether you look at the headline, ex-auto or ex-auto and gas. All of those components far exceeded market expectations and I think it's a clear sign that U.S. consumer spending remains strong. On balance I think it's the latest sign here that the U.S. economy is outpacing a lot of its major counterparts in recovery, and I think this should continue to keep the dollar well supported, especially against the backdrop of mounting concerns in Europe and Spain."

WAYNE KAUFMAN, CHIEF MARKET ANALYST AT JOHN THOMAS FINANCIAL IN NEW YORK

"Retail sales are good, and the consumer continues to be strong. That's a good point for our economy. Manufacturing was decidedly a negative surprise, the slowest in five months. We'll have to see if that's a one-off or the start of a trend. If manufacturing slows down, that will certainly be a headwind to the economy.

"So far we're off to a good start on earnings, but there are a lot of issues on the table we also need to pay attention to. There are times when earnings take a back seat to other issues in the market, and this could be one of those times."

VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS

"Retail sales rose by 0.8% in March and for the third month, 'core' retail (excluding gas and autos) showed solid growth. March's gain is some two times larger than expected after February's 1% advance (originally up 1.1%), when the market thought there would be slowed activity after February's accommodative weather had pulled consumption forward. It is true that some businesses' sales dropped from February (especially apparel and sporting good stores), but overall retail kept its pace. Sales are up 6.5% from last March."

MARKET REACTION

STOCKS: U.S. stock index futures rise.

BONDS: U.S. Treasury debt prices dip.

FOREX: Dollar slightly extends gains versus euro.

(Americas Economics and Markets Desk; +1-646 223-6300)

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