Retail sales beat estimates in February as consumers quickly adapted and adjusted their spending in response to an increase in payroll taxes and higher gasoline prices, according to the National Retail Federation.
Last month’s retail sales, excluding automobiles, gas stations and restaurants, increased 0.7 percent seasonally adjusted from January and increased 0.5 percent unadjusted year-over-year, NRF said.
“Retail continues to show its importance to the economy,” NRF President and CEO Matthew Shay said. “That said, our consumer research consistently shows a cautious shopper that is making tough spending decisions based upon economic uncertainties, lower paychecks and higher prices for things such as gas. This is particularly true among those making $50,000 or less a year.
“While retail sales numbers indicate good momentum for the economy, consumers with less earning power may continue to face ongoing pressure, and retail sales will encounter further challenges as sequestration takes full effect in March.”
February retail sales, released today by the U.S. Department of Commerce, showed total retail and food services sales, which include non-general merchandise categories such as automobiles, gasoline stations and restaurants, increased 1.1 percent seasonally adjusted month-to-month and increased 4.6 percent adjusted year-over-year.
“Consumers, once again, exceeded economists’ expectations and estimates in February,” NRF Chief Economist Jack Kleinhenz said. “It may be too early to measure the impact of the payroll tax hike and higher gasoline prices on consumer spending. However, this portends a good, but not great, first quarter for retailers as consumers continue to breathe life into the economy.”
Helping to boost sales in February were higher spending for building materials, garden equipment and supplies, clothing and clothing accessories, and general merchandise.
Areas showing weakness included electronics and appliance stores, furniture and home furnishing stores, sporting goods shops and hobby, book and music stores.
Health and personal care stores’ sales were flat.