U.S. 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 gasoline. Friday’s report from the Commerce Department pointed to strong consumer spending and acceleration in economic growth in the first quarter.
Total retail sales rose 1.0 percent, the Commerce Department said on Friday, 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 percent increase from a previously reported 0.3 percent gain. Compared to February last, sales were up 8.9 percent.
“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 percent last month after gaining 0.6 percent in January.
U.S. 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 percent increase in gasoline prices to spend on a range of goods, including autos, whose sales rose 2.3 percent after rising 1.2 percent in January. Receipts at gasoline stations increased 1.4 percent after rising 1.3 percent in January. Excluding gasoline, sales rose 0.9 percent after rising 0.6 percent 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 consumng, which accounts for 70 percent of U.S. economic activity, grew at a 4.1 percent annual rate in the fourth quarter, the fastest in more than four years.
