Retail sales rise 1.1 percent in February
WASHINGTON (AP) — Americans stepped up spending on retail goods in February, evidence that a stronger job market is boosting the economy.
Consumers bought more autos, clothes and appliances. They also paid higher prices for gas.
The Commerce Department said Tuesday that retail sales increased 1.1 percent last month, the biggest gain since September. The government also revised January’s sale figures up to show a 0.6 increase.
One factor driving the increase was a 3.3 percent rise in gasoline sales last month, reflecting a surge in gas prices. But excluding gas station sales, retail sales still increased a solid 0.8 percent. Auto sales were strong. Department stores had their largest gain in more than a year.
The February gain pushed total sales to a record $407.8 billion. That figure is 20.1 percent higher than the recession low hit in March 2009.
A rebound in hiring helped lift consumer confidence in February to the highest level in a year and translated into more spending. The economy has gained 734,000 jobs since December. That gain lowered the unemployment rate to 8.3 percent, the lowest in three years.
In February, U.S. automakers reported the best annual sales pace in four years, despite the surge in gas prices. Overall U.S. auto sales rose 16 percent last month, largely on the strength of Detroit’s small cars.
Retail merchants also saw big gains. They reported a 6.7 percent increase in February compared with sales a year ago, according to the International Council of Shopping Centers’ tally of 21 retailers. The increased followed a more modest 2.7 percent rise in January.
An unusually mild winter had depressed sales of cold-weather items during the holiday season, but that turned out to be beneficial in February because it helped lift spending on spring merchandise.
Economists are concerned that consumers could limit spending this year if their wages continue to lag inflation. Rising gas prices also could put further strains on household budgets.
The average price for a gallon of gas was $3.80 Monday, 30 cents more than consumers paid a month ago.
The overall economy grew at an annual rate of 3 percent in the final three months of last year, but part of that growth came from businesses rebuilding their inventories. That growth is expected to slow in the current January-March quarter, and many economists expect slower growth from the fourth-quarter pace.
For all of 2012, analysts at JPMorgan Chase forecast growth of 2.2 percent, an improvement from the 1.7 percent growth in 2011.