More Good News: Retails Sales Up 1.1%

The Federal Reserve meets again today in Washington and we got more good economic news this morning. The Commerce Department said that retail sales rose by 1.1% in February. That’s the strongest growth in five months. Retail sales rose by 0.6% in January.

Details of the report were fairly upbeat and its tenor was also boosted by upward revisions to the prior months’ data, suggesting recent solid gains in employment were helping to cushion consumers against steep rises in gasoline prices.

“The big thing for the consumer is that the labor market has improved and there’s income growth. Things look better than six months ago,” said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut.

…

Sales last month were buoyed by a 1.6 percent rise in sales of motor vehicles, reflecting pent-up demand by households and growing confidence in the economy as job creation speeds up.

A devastating earthquake and tsunami in Japan caused disruptions to auto production last year and left dealers without models that consumers wanted to buy.

Excluding autos, retail sales advanced 0.9 percent last month, adding to January’s upwardly revised 1.1 percent gain.

Consumers bought motor vehicles even as they paid more for gasoline at the pump. Gas prices rose 20 cents last month, according to government data.

Sales at gasoline stations surged 3.3 percent, the biggest gain since March last year, after rising 1.9 percent in January. Excluding autos and gasoline, sales rose 0.6 percent in February after increasing 1.0 percent the prior month. Gasoline accounted for 11.5 percent of retail sales in February.

Posted by on March 13th, 2012 at 9:44 am


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