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US retail sales beat blizzards with surprise rise
AFP - Saturday, March 13
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People pass storefront window displays on February 2010 in Pasadena, California. The storied American consumer braved blizzards and economic headwinds to shop in February, unexpectedly pushing up retail sales for the second straight month, official data showed Friday.
WASHINGTON (AFP) - – The storied American consumer braved blizzards and economic headwinds to shop in February, unexpectedly pushing up retail sales for the second straight month, official data showed Friday.
Retail and food service sales rose 0.3 percent from January to 355.5 billion dollars, the Commerce Department said.
Most analysts expected they would fall 0.2 percent amid fierce winter storms that hammered large areas of the country.
The surprise advance sparked hopes the economy is finally gaining traction in what has been so far a government-fuelled recovery from the worst recession since the Great Depression.
"Even with some terrifically blustery storms, consumers managed to spend money in February," said Robert Brusca at FAO Economics.
"You can bet against the sun coming up or the full moon cycle turning a guy into a vampire, but never ever bet against the US consumer. He is on his way back and... will lift the recovery to higher ground."
The monthly retail sales report is a key indicator of consumer spending, which accounts for two-thirds of US output, and thus economic momentum.
But a separate report on consumer sentiment disappointed Friday, highlighting the fragile nature of the budding recovery.
The University of Michigan's consumer confidence index dropped for the second consecutive month in March, to 72.5 from 73.6 in February, instead of rising to 74.0 as analysts expected.
The improvement in retail sales in February was broad-based, with shoppers snapping up a range of goods from clothing, furniture to electronics and appliances.
Only two of the 12 sectors measured declined.
Automobile sales tumbled 2.0 percent, the steepest skid since September 2009, in part reflecting the impact of Japanese automaker Toyota's massive recalls.
Health and personal care sales dropped 0.7 percent, the biggest fall since February 2004.
"Surprisingly, given the bad weather, the non-store retailers' category -- which includes Internet shopping -- didn't share in the gains. Non-store sales were flat," said Nigel Gault, chief US economist at IHS Global Insight.
Excluding auto and gasoline sales, which can be volatile from month to month, retail sales accelerated to a 0.9 percent gain after rising 0.5 percent in January.
Gault said the data signals real consumer spending will rise about 3.0 percent in the January-March period, noting that would be the fastest increase in three years.
Retail sales were 3.9 percent higher than in February 2009, when the government passed a nearly 800-billion-dollar stimulus package in a bid to pull the world's largest economy out of the downturn that began in December 2007.
Economists say consumer spending will be vital to a sustainable recovery as the government exits extraordinary stimulus measures.
President Barack Obama's administration and the Federal Reserve have predicted consumer spending would remain weak this year and, unlike in past recoveries, would not be the main driver of economic growth.
The unemployment rate, hovering near double-digit levels, is expected to remain high amid what some say will be a "jobless recovery."
The economy expanded at a powerful 5.9 percent pace in the 2009 fourth quarter after 2.2 percent growth in the third quarter as the world's largest economy shook off a full year of contraction.
Ian Shepherdson of High Frequency Economics cautioned that it was too soon to declare the consumer was back after after the Commerce Department revised January's retail sales gain down to 0.1 percent from 0.5 percent.
"The continued weakness in consumer sentiment suggests little scope for a sustained acceleration," Shepherdson said.
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