BLBG:Retail Sales in U.S. Climb the Most in Five Months as Recovery Takes Hold
Retail sales in the U.S. rose in February by the most in five months, reflecting broad-based gains that indicate the world’s largest economy is picking up.
The 1.1 percent advance matched the median forecast of 81 economists surveyed by Bloomberg News and followed a 0.6 percent increase in January that was larger than previously estimated, Commerce Department figures showed today in Washington. Demand improved in 11 of 13 industry categories, including auto dealers and clothing stores.
Sales at chains like Gap Inc. (GPS) and Target Corp. (TGT) last month beat analysts’ estimates, a sign an improving job market is bolstering consumer spending, the biggest part of the economy. A pickup in payrolls accompanied by limited wage gains may not be enough to satisfy Federal Reserve officials, who today will probably reaffirm a commitment to keep interest rates low.
“Consumers are spending at a decent clip,” Omair Sharif, an economist at RBS Securities LLC in Stamford, Connecticut, said before the report. “The labor market is getting traction. Higher gasoline isn’t going to be as much of a hit to consumers as last year.”
Economists’ estimates in the Bloomberg survey ranged from gains of 0.5 percent to 2.1 percent. The Commerce Department revised the January increase from a previously reported 0.4 percent gain.
Sales increased 1.6 percent at automobile dealers, reversing a 1.6 percent decrease the prior month, today’s report showed. The results fell short of industry figures that showed an even bigger gain.
Auto Sales
Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. (GM) Light-vehicle sales accelerated to a 15 (SAARTOTL) million annual rate, the strongest since February 2008, according to Ward’s Automotive Group.
“There are a number of factors that are helping release this pent-up demand,” Don Johnson, vice president of GM’s U.S. sales, said on a March 1 conference call with analysts. “They include stronger employment, good credit availability, and both of those are leading to improving consumer sentiment.”
Purchases excluding autos increased 0.9 percent, today’s report showed, exceeding the median forecast of economists surveyed that projected a 0.7 percent gain.
The retail sales data, which aren’t adjusted for inflation, reflected a 3.3 percent jump in receipts at service stations, the biggest gain in almost a year, as gasoline costs climbed. Regular (3AGSREG) fuel in February averaged $3.56 a gallon, or 18 cents more than January, according to AAA, the nation’s biggest auto organization. It’s advanced further this month, reaching $3.80 on March 11, the highest since May.
Clothing Stores
Purchases at clothing stores rose 1.8 percent, the most since November 2010. Furniture and general merchandise stores were the only categories to show a decrease in demand.
Gap, the largest U.S. apparel chain, and Target, the country’s second-largest discount retailer, were among merchants whose February sales gains at stores open at least a year exceeded analysts’ average estimates. Unseasonably warm weather may have helped to spur demand for spring merchandise.
The average temperature was 38.2 degrees Fahrenheit (3.4 Celsius) last month, 3.6 degrees warmer than the 20th century average and the 17th warmest February in 118 years.
Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales rose 0.5 percent after a 1 percent increase in the previous month.
More Jobs
Employers boosted payrolls more than forecast in February, capping the best six-month streak of job growth since 2006. The 227,000 increase followed a revised 284,000 gain in January that was bigger than first estimated, the Labor Department reported on March 9. The jobless rate held at a three-year low of 8.3 percent.
Fed policy makers may reiterate a plan to keep interest rates low at least through late 2014 after meeting later today. Chairman Ben S. Bernanke, in his semiannual monetary policy report to Congress, said maintaining monetary stimulus is warranted even with employment gains and a lower jobless rate.
While there are “some positive developments in the labor market,” Bernanke told lawmakers on March 1, “the pace of expansion has been uneven.” The rise in gasoline prices “is likely to push up inflation temporarily while reducing consumers’ purchasing power,” he said.
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
