US retail sales up 0.3 per cent in February; sign economy is recovering from harsh winter
WASHINGTON - U.S. retail sales bounced back in February after suffering a steep decline during a bitterly cold January. Shoppers spent more on autos, clothing and furniture.
The Commerce Department said Thursday that seasonally-adjusted retail sales rose 0.3 per cent in February. Spending had fallen 0.6 per cent in January, revised down from the 0.4 per cent decline initially reported. Retail spending also fell 0.3 per cent in December.
The increase suggests that consumer spending has started to recover after being tempered by snowstorms and freezing temperatures that blanketed much of the country.
Auto sales rose 0.3 per cent. Excluding volatile spending on autos, gas and building supplies, retail sales increased 0.3 per cent from December.
Last month's rebound almost brought retail spending back to its December levels. Purchases at restaurants, online retailers and department stores also improved, although the economy has yet to fully shake off winter's impact.
Over the past 12 months, retail sales have risen a modest 1.5 per cent.
The retail report offers a first look at February's consumer spending, which accounts for about 70 per cent of all economic activity. Many economists came into 2014 projecting that stronger consumer spending would cause growth to accelerate, only to find those estimates frustrated by the freezing weather across much of the country.
The February employment report also suggested that the overall economy has recovered momentum. Employers added 175,000 jobs last month after weak gains in the previous two months.
But the improvement in retail spending has not led yet to more work at stores. Retailers cut 4,100 workers in February. The losses were concentrated in electronics, department, sporting goods, hobby, book and music stores.
Separate sales reports by auto companies indicate that consumer demand may improve in the spring. Consumers bought just under 1.2 million new cars and trucks in February, according to motor vehicle makers. That follows a 3 per cent drop in Januaryâ€” the first year-over-year decline since August 2010.
General Motors, Ford and Toyota each reported sales declines for February. The country's top three automakers said sales began to recover in the second half of last month, when the weather improved.
So far this year, new vehicle sales have been on pace to reach a little more than 15 million for the year. In 2014, the industry sold 15.6 million cars and trucks. Economists forecast that auto purchases will approach 16 million this year.
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