BLBG: February Retail Sales in U.S. Decreased Less Than Forecast
Sales at U.S. retailers in February fell less than forecast and January's gain was almost double the previous estimate, indicating the biggest part of the economy may be starting to stabilize.
The 0.1 percent decrease reflected a slump in demand for cars and followed a revised 1.8 percent jump in January, the Commerce Department said today in Washington. Purchases excluding automobiles unexpectedly climbed 0.7 percent.
After slumping at the fastest pace in three decades, consumer spending may stop hemorrhaging in coming months as the drop in fuel costs puts more money in Americans' pockets. Still, mounting unemployment and falling home and stock values pose a challenge that may swamp Obama administration efforts to revive the economy by creating jobs and stemming foreclosures.
``The downdraft in consumer spending has lessened,'' Ellen Zentner, a senior U.S. economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. ``The consumer will creep back into the market. There's a lot of pent-up demand, and when that starts to come forward, it can help the economy find some traction.''
Sales were projected to fall 0.5 percent in February after an originally reported 1 percent gain the prior month, according to the median estimate of 77 economists in a Bloomberg News survey. Forecasts ranged from a gain of 1 percent to a decline of 1.5 percent.
Excluding automobiles, last month's gain followed a 1.6 percent jump in January that also exceeded the government's previously estimated 0.9 percent increase. Such purchases were forecast to decrease 0.1 percent, according to the survey median.
Auto Slump
Sales at automobile dealers and parts stores slumped 4.3 percent, the most since October.
Industry figures earlier this month showed sales in February fell to the lowest level since 1981, led by a 53 percent plunge at General Motors Corp., which is surviving with the help of government loans.
Other categories showing decreased demand included building material stores, grocery stores and restaurants and bars.
A jump in receipts at service stations as gasoline prices rebounded led gainers. Filling station sales climbed 3.4 percent. The average cost of regular gasoline rose 14 cents to $1.92 a gallon in February from January, and is holding near that level so far this month, according to AAA.
Excluding autos, gasoline and building materials, the retail group the government uses to calculate gross domestic product figures for consumer spending, sales increased 0.5 percent, after rising 1.7 percent. The government uses data from other sources to calculate the contribution from the three categories excluded.
Today's report may prompt economists to boost estimates for consumer spending this quarter. A Bloomberg survey earlier this month showed the median forecast called for the world's largest economy to shrink 2.5 percent this year, the most since 1946. Consumer spending, which accounts for 70 percent of the economy, was projected to fall at a 1.7 percent annual pace this quarter and decline 0.7 percent from April to June.
Economists also projected the jobless rate will climb to 9.4 percent by the end of the year and remain elevated through 2011, one reason for the gloomy outlook on spending.
Employers cut 651,000 jobs in February and the unemployment rate jumped to 8.1 percent, the highest level since December 1983, Labor reported last week. President Barack Obama's stimulus plan aims to create or save 3.5 million jobs, and the economy has lost 4.4 million jobs since the recession began in December 2007.
Economic `Crisis'
The economic crisis is ``unlike anything we've seen in our time,'' Obama said in a March 10 speech in Washington.
In addition to service stations, clothing, furniture, electronics and department stores showed gains in sales.
Wal-Mart, the world's largest retailer, reported a 5.1 percent gain in February sales at stores open at least a year. Consumers, trying to make ends meet as job losses mount, are being drawn to its lower prices on groceries, fuel and electronics.
Retailers reporting sales declines in February included Macy's Inc. and J.C. Penney Co., clothing chains Gap Inc. and Abercrombie & Fitch Co., and luxury sellers Nordstrom Inc. and Neiman Marcus Group Inc., company announcements showed.
The rest of the year will be ``very difficult,'' Dallas-based Neiman's Chief Executive Burton Tansky said in a conference call with analysts yesterday. The retailer is canceling orders, returning goods to vendors and cutting expenses, Tansky said.
