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March Retail Sales Soar, Jobless Claims Slide As US Recovery Takes Hold

President Joe Biden's $1.9 trillion stimulus provided a huge boost to March retail sales, while state re-openings triggered a big drop in weekly jobless claims.

U.S. retail sales soared past Wall Street forecasts Thursday as billions in stimulus from the American Rescue Act found its way into the broader economy as states continue to reopen in the waning months of the pandemic.

March retail sales were marked 9.8% higher from last year to a collective $619.1 billion, the Commerce Department said, smashing the Street consensus forecast of a 5.9% gain and February's upwardly-revised total of $563.7 billion. Stripping out auto and gasoline sales, retail sales were up 8.2%, the Commerce Department report noted.

Weekly jobless claims, meanwhile, fell to 567,000, the lowest levels since the pandemic began to hammer the labor market last year and well south of the Street forecast of 700,000, pulling the four-week average to 683,000.

The data supports, at least to this point, the recent view from JPMorgan JPM CEO Jamie Dimon, who said last week that he had "little doubt" that "excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom."

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U.S. equity futures bounced higher on the data, with contracts tied to the Dow Jones Industrial Average indicating a 185 point opening bell gain and those linked to the S&P 500 priced for a 25 point gain.

Nasdaq Composite futures, meanwhile, are indicating a 135 point opening bell advance as benchmark 10-year note yields eased under 1.6%. 

Earlier this week, Commerce Department data showed consumer prices increasing at the fastest monthly pace since 2012, but the headline CPI reading for the month of March -- at 2.6% -- was only marginally ahead of Wall Street forecasts and tamed by consistent messaging from the Federal Reserve that it plans to keep interest rates unchanged for at least the next two years. 

However, comparable figures for the months of April through July, which will reflect changes from the peak of last year's coronavirus pandemic, are expected to show a notable acceleration of inflation measures that investors are concerned will last for a longer period than Fed officials, who have consistently said the impact will be temporary.