US retail sales rise despite fuel costs
US retail sales posted their largest gain in four months in February as shoppers stepped up purchases of autos, clothes and other goods even as they spent more for fuel.
The report from the Commerce Department pointed to strong consumer spending and acceleration in economic growth in the first quarter.
Total retail sales rose one per cent, the Commerce Department said, the largest gain since October and the eighth straight monthly advance. The rise was in line with economists’ expectations.
January sales were revised up to a 0.7 per cent increase from a previously reported 0.3 per cent gain. Compared to February last, sales were up 8.9 per cent.
“Consumer spending is still expanding at a healthy pace. Some of the strength we saw during the holidays continued into this year. That bodes well for the economy remaining on track for recovery,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.
Excluding autos, sales rose 0.7 per cent last month after gaining 0.6 percent in January.
US stock index futures briefly turned positive on the data, while Treasury debt prices fell. The dollar held gains against the euro.
Consumers last month overcame a 3.7 per cent increase in gasoline prices to spend on a range of goods, including autos, whose sales rose 2.3 per cent after rising 1.2 per cent in January.
Receipts at gasoline stations increased 1.4 per cent after rising 1.3 per cent in January. Excluding gasoline, sales rose 0.9 percent after rising 0.6 per cent in January.
“Retail spending has mostly been accelerating among people with sufficient income for discretionary spending so they are not as affected by higher gasoline prices as people with more limited incomes,” said Jerry Webman, chief economist at OppenheimerFunds in New York.
Unrest in the Middle East and North Africa has pushed Brent crude oil prices above $100 a barrel, raising concerns that high gasoline prices could eat into consumer pocketbooks already strained by high unemployment.