US retail sales rise boosts recovery hopes

US retail sales rose more than expected in April, helped by a surprise increase in motor vehicle sales.


The Commerce Department said total retail sales rose by 0.4% following an upwardly revised 2.1% rise in March.

Compared to April 2009, sales were 8.8% higher, and have now increased for seventh straight months.

The figures have increased hope that consumer spending, which accounts for two thirds of the US economy, will keep the recovery on track in coming months.

"This adds to a string of data we have received indicating that consumer spending is improving," said James Cox, managing partner at Harris Financial Group in Virginia.

Motor vehicle and parts purchases unexpectedly rose 0.5%, following a 6.7% increase in March.

Excluding this category, sales rose 0.4% in April after rising 1.2% in March.

US economic growth had initially had been largely driven by businesses replenishing inventories, but consumer spending grew in the first quarter at its fastest pace in three years.

Increased hiring

Meanwhile, another report on Friday - from the Federal Reserve - showed industrial production rose 0.8% in April, better than economists' prediction of 0.6%.

It means manufacturing also appears to be playing a leading role in supporting the economic recovery.

Stronger manufacturing has also seen factories increase hiring.

Last week, manufacturers added 44,000 jobs in April, the most since 1998.

Businesses that make fabricated metal products, machinery, electrical equipment and appliances, plastics, food, and paper products all posted job gains.

Sourced from The BBC