American spending rising, good sign for economy

by on April 14th, 2004

Consumers went on a tear last month, boosting retail sales by 1.8 percent in a performance that capped one of the most robust shopping quarters in years, the Commerce Department reported yesterday.

The startling surge in spending, which follows strong sales gains of 1 percent and 0.5 percent in the previous two months, prompted economists to raise their estimates of first-quarter growth to as high as 6 percent from 4 percent previously.

The blowout sales gains were led by record spending at hardware stores and took financial markets by surprise. The Dow Jones Industrial Average rallied at first in response to the report, but dropped 134 points to 10,381 on worries that the growth surge will prompt the Federal Reserve to raise interest rates in coming months.

Etalkinghead Staff