The US economy continues to show signs of recovery, as newly-vaccinated Americans head out to spend their stimulus cheques.

Retail sales were up by a seasonally-adjusted 9.8%, having dropped about 3% the previous month, the Commerce Department said on Thursday.

The rise was much better than the 5.5% increase economists had forecast.

A third round of stimulus cheques was sent out late last month, with most adults getting $1,400 (£1,000) – so far about 159 million payments have been made, totalling $376bn (£272bn), the US government said.

The cheques are part of a $1.9trn (£1.4trn) COVID-19 relief bill, aimed at helping Americans through the pandemic.

A survey by the New York Federal Reserve Bank found that most people planned to spend about a quarter of their most recent cheque on goods, while using the rest to pay off debt or save.

The figures showed that Americans spent their money on cars, eating out, and home renovations, but sporting goods stores also saw sales jump by 23.5% and clothing store sales were up 18.3%.

At department store Macy’s, the demand was for dresses, as proms and weddings resume.

Levi Strauss said customers were keen on wide leg and loose-fitting jeans, following a year at home when exercise programmes might have slipped a bit.

But Bed Bath & Beyond said many of its customers did not qualify for the stimulus cheques and those who did were spending on food, clothing, and gadgets.

Increased confidence is inspiring more Americans to shop or eat out, as more people get vaccinated and the country’s vaccination programme shows some success.

US consumer confidence surged in March to its highest level in a year, and employers added 916,000 jobs last month – the highest number since August.

The number of Americans applying for unemployment benefits fell last week to 576,000, a fall of 193,000 since the previous week and a significant drop from the peak of 900,000 in early January.

In the week ending March 27, 16.9 million people were collecting unemployment benefits, down from 18.2 million the previous week.

The US unemployment rate has also fallen from a high of 14.8% a year ago to 6%.

Federal Reserve chairman Jerome Powell told 60 Minutes: “We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly.

“This growth that we’re expecting in the second half of this year is going to be very strong. And job creation, I would expect to be very strong.”

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