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Retail sales rose in February despite snowstorms

A woman shops for beach towels at a Century 21 department store in New York earlier this month. Sales at general merchandise stores — such as Century 21, Walmart and Macy’s — rose 1 percent in February after a 1.3 percent rise in January.

Associated Press

A woman shops for beach towels at a Century 21 department store in New York earlier this month. Sales at general merchandise stores — such as Century 21, Walmart and Macy’s — rose 1 percent in February after a 1.3 percent rise in January.

WASHINGTON — Retail sales posted a surprising increase in February as consumers refused to let snowstorms stop them from stepping up purchases of everything from clothes to appliances. The improvement provided hope that the recovery from the Great Recession is gaining momentum.

"This is more than a one-month wonder," said Stuart Hoffman, chief economist at PNC Financial in Pittsburgh. "This is telling us that consumers, who had been tightening their belts throughout the recession, have now loosened them a notch."

For February, sales rose 0.3 percent, the Commerce Department said Friday, surpassing expectations of a 0.2 percent decline.

The overall gain was held back by a 2 percent decline in auto sales, partly reflecting the recall problems at Toyota. Weakness in auto sales also caused a downward revision in January retail sales. They were reduced to an increase of just 0.1 percent, down from the 0.5 percent originally reported.

But outside of autos, sales rose a strong 0.8 percent in February, far better than the 0.1 percent rise economists had expected.

Some analysts expressed concern about whether the spending gains can be sustained, given that unemployment remains high — 9.7 percent nationally in February — and consumer confidence is still shaky.

"Weak jobs growth, low wages growth and tight credit mean that any further acceleration in consumption growth is unlikely," Paul Dales, an economist at Capital Economics, wrote in a research note.

Prospects would improve if businesses, which have shed 8.4 million jobs since the recession began in December 2007, started rehiring laid-off workers. That would give households the incomes they need to support spending growth.

The February retail sales report showed widespread improvement. Sales at general merchandise stores, the category that includes department stores and big discounters such as Walmart, rose 1 percent after a 1.3 percent rise in January.

Sales at appliance stores were up 3.7 percent. Sales at hardware stores rose by 0.5 percent. Furniture sales increased 0.7 percent.

Restaurants and bars enjoyed a 0.9 percent advance, their biggest gain in nearly two years.

Some analysts had suspected that the February retail sales report could offer a positive surprise, given encouraging news last week from the nation's big retail chains. The International Council of Shopping Centers had reported that sales jumped 3.7 percent in February, compared with a year ago.

Shoppers shrugged off snowstorms to visit an array of merchants, from luxury retailer Nordstrom to middlebrow Macy's to discounter Target Corp. All three chains reported solid sales increases that beat analysts' expectations. Another encouraging sign that the reports showed was that shoppers are becoming more willing to pay full price, instead of focusing only on deeply discounted items.

FAST FACTS

Widespread gains

February retail sales were strong across most segments, with the notable exception of automobiles:

General merchandise stores: +1 percent

Appliance stores: +3.7 percent

Hardware stores: +0.5 percent

Furniture: +0.7 percent

Restaurants and bars: +0.9 percent

Autos: -2 percent

Retail sales rose in February despite snowstorms 03/12/10 [Last modified: Friday, March 12, 2010 8:53pm]
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