Retail sales upticked in the United States during February, reversing course from contracting in the two prior months, suggesting that the nation’s economy gained some traction last month after a winter lull chock-full of harsh conditions across the country.
The Commerce Department reported Thursday morning that retail sales improved 0.3 percent to $427.2 billion in February, topping economist predictions for a 0.2-percent gain. Meanwhile, the headline figure for January was downwardly revised to show a decline of 0.6 percent in sales compared to December, rather that the 0.4-percent drop that was originally estimated. December’s estimate was also taken lower to show a decline of 0.3 percent, instead of 0.1 percent.
Compared to February 2013, sales were up 1.5 percent, suggesting that the sluggishness in December and January was an anomaly that could be attributed to snowy and icy conditions that kept people inside and generally disrupted the entire economy. Many economists believe that demand is pent-up because of the inclement weather, which will lead to an increase in key economic barometers, such as retail sales. Retail sales account for about 30 percent of all consumer spending.
Gains were posted in most kinds of business month-over-month. Motor vehicle and parts dealers’ sales increased 0.3 percent and 2.2 percent from last year’s month. Sales at sporting goods, hobby, book and music stores were up 2.5 percent for the month, but down 5.2 percent compared to last February. Furniture stores (+0.4%), building materials stores (+0.3%), bars and restaurants (+0.3%) and gas stations (+0.1%) all showed increases compared to January.
Year-over-year, gas station sales were off by 4.6 percent, but the average cost of gasoline was 21 cents per gallon higher at the same time in 2013.
Conversely, sales fell at electronics and appliance retailers (-0.2%), food and beverage stores (-0.2%), general merchandise (-0.3%) and other miscellaneous stores (-0.9%).
Excluding the volatile motor vehicles and parts segment, retail sales advanced 0.3 percent, beating economist expectations of a 0.2 percent rise. So-called “core” retail sales, which don’t include autos, building materials, food services of gasoline, were also up 0.3 percent.
In Other Economic Reports…
In a separate report today, the Labor Department showed that fewer Americans that expected filed applications for initial jobless claims, lending to the idea of a strengthening economy in the face of freezing weather. First-time filings in the week ended March 8 dropped by 9,000 to 315,000, representing the lowest level since late in November. Economist thought initial claims would rise to 331,000.
Wall Street began the day in an upbeat fashion following the economic reports, but have since followed global markets to turn lower as the morning winds to a close. European markets sank to about one-month lows as more disappoint reports surfaced from China showing the world’s second biggest economy is going through a rough patch. Both retail sales and industrial output showed expansion, but at slower-than-expected rates.
The Dow Jones Industrial Average has now shed 80 points, the broader S&P 500 is lower by 7 points and the Nasdaq has eased 20 points.
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