NEW YORK - Against head winds including cold weather, rising gasoline prices and a late Easter, retailers' March sales topped downbeat expectations, in a sign there's still some resilience in shoppers' spending power.
Among 25 retailers that reported their results, more than four-fifths of them exceeded Wall Street expectations, according to Thomson Reuters data. Upside was seen across all segments from discounters and drug store chains to teen-apparel retailers and department store group.
The news sent the S&P Retail Index up with department store group, including Nordstrom Inc., Macy’s Inc., J. C. Penney Co. and Kohl’s Corp., among the lead gainers after each of their results topped expectations. Costco Wholesale Corp. stock rose after the wholesale club chain’s sales advanced a better-than-expected 13 percent and results excluding higher gasoline prices and stronger foreign currencies rose 8 percent, also topping analysts’ estimates.
High-end retailer Saks Inc. sales rose 11.1 percent in March, handily exceeding the 0.8 percent average increase expected by Wall Street.
Among the few disappointments, Gap Inc. sales fell 10 percent, worse than the 7 percent decline analysts were looking for. The company also lowered its first-quarter forecast by 4 cents a share, as it blamed the negative impact of the quake in Japan.
Final March sales rose 2.2 percent, marking the 19th consecutive monthly gain, beating expectations for a 0.5 percent decrease, according to Retail Metrics.
According to National Retail Federation’s 2011 Consumer Intentions and Actions survey, conducted by BIGresearch, the average consumer is expected to spend $131.04 on everything from candy to clothes for Easter – up from last year’s $118.60 but not quite to pre-recession levels. Total spending on Easter-related merchandise is expected to reach $14.6 billion.
JOBLESS CLAIMS DOWN
As consumer spending went up, the number of people who applied for unemployment benefits fell slightly last week, indicating that the U.S. jobs market continues to gradually improve.
New applications for state unemployment benefits dropped by 10,000 to a seasonally adjusted 382,000 in the week ended April 2, the Labor Department said Thursday. Claims for the prior week were revised up by 4,000 to 392,000.
Economists surveyed by MarketWatch have expected new applications for jobless benefits to drop to 385,000.
The average of new claims over the past four weeks, meanwhile, declined by 5,750 to 389,500. The four-week average is considered more accurate a barometer of employment trends because it lessens week-to-week volatility in the data.
Jobless claims have fallen under 400,000 in seven of the past nine weeks. When the U.S. economy creates lots of new jobs, new applications for unemployment benefits tend to drop well below 400,000 for an extended period.
The downward trend in weekly claims, which peaked during the recession at 659,000, appears to be reflected in a gradually improving labor market. The U.S. economy added a net 216,000 jobs in March, with private-sector employment growing by more than 200,000 in each of the past two months – the first time that’s happened in five years.
Yet while the U.S. jobless rate ticked lower last month, it’s still elevated at 8.8 percent.
CREDIT ON UPSWING
Borrowing increased by $7.6 billion, or 3.8 percent, in February, the Federal Reserve said Thursday. It was the fifth straight monthly gain.
All of the strength came in the category that includes car loans. That increased 7.7 percent. Borrowing in the category that covers credit cards fell 4.1 percent. That category has risen only once in the more than two years since the 2008 financial crisis peaked.
The gains in total credit pushed borrowing up to a seasonally adjusted annual rate of $2.42 trillion in February. That’s 1 percent from the three-year low hit in September.
Households began borrowing less and saving more to cope with the severe 2007-2009 recession. But economists expect that the period of belt-tightening is ending. They see consumer credit rising to more normal levels, helping to support gains in consumer spending.
MarketWatch and The Associated Press contributed to this report.