Washington, DC, Mar. 11--U.S. retail sales posted their biggest gain in three months during February, driven by strong demand for motor vehicles, but other retailers had a tough time getting out of the garage.
Retail sales advanced 0.6% last month, the Commerce Department said Thursday, the best performance since November. Sales were boosted by a 2.7% increase in demand for motor vehicles and auto parts, the largest advance in the sector since March. But demand in other categories was mixed, and excluding autos and related purchases like gasoline, overall retail sales were flat.
Wall Street had been expecting an increase in overall sales. A Dow Jones-CNBC survey of 19 economists forecast sales growth of 0.5% for the month--whether auto sales were included or not.
In a positive turnaround, retail sales in January were revised higher to show a 0.2% increase; it was originally estimated sales fell 0.3% that month. January is typically a slow month for retailers, as consumers curtail their spending after the holidays. December sales rose 0.4%.
Sales at clothing stores, electronics and appliance stores and department stores also posted gains. But sales went down at furniture stores, sporting goods, book and music stores, and health and beauty shops. Sales were flat at building and garden supply stores as bad winter weather hit some parts of the country.
Retail sales were up by 7.9% over February of 2003.
Consumer spending accounts for roughly two-thirds of all economic activity in the U.S., and consumers' willingness to open their wallets has kept the economy going through the 2001 recession and the subsequent recovery. Low borrowing costs, extra cash from a wave of refinancing and tax cuts have helped to support spending. But there are signs that consumers' recent robust confidence has begun to ebb as the jobless recovery drags on.
Indeed, some economists said the chances of an economic slowdown in the second half of this year have gone up in the wake of last week's disappointing employment report. The economy added just 21,000 jobs in February--all of them in government. Private payrolls were flat.
