WASHINGTON – Sales at U.S. retailers rose in February by the most in five months as an improved job market and stronger household finances cushioned the effect of higher payroll taxes.
The 1.1 percent advance exceeded all projections in a Bloomberg survey and followed a revised 0.2 percent gain in January, Commerce Department figures showed today in Washington. The median forecast was for a 0.5 percent advance. Sales excluding the volatile categories of autos and gasoline rose 0.4 percent.
Progress in the job market is shoring up sentiment and spurring demand at merchants including Costco Wholesale Corp., easing the burden of a two percentage-point increase in the levy that funds Social Security. The boost to household wealth from home values and stock prices has also helped consumers maintain spending in the face of higher fuel prices.
“It shows some steady underlying strength,” said Terry Sheehan, an economic analyst at Stone & McCarthy Research in Princeton, N.J., the second-best forecaster of retail sales in the last two years, according to data compiled by Bloomberg. “These numbers are cause for cautious optimism.”
Stock-index futures erased losses after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June rising less than 0.1 percent to 1,547.4 at 8:47 a.m. in New York.
Estimates of the 82 economists in the Bloomberg survey ranged from a 0.6 percent decline to a 1 percent increase. The reading for January was revised from an initially reported gain of 0.1 percent.
Eight of 13 major categories showed increases last month, led by a 5 percent jump in receipts at gasoline stations that reflected higher fuel costs. Sales also climbed at building materials outlets, auto dealers and general merchandise stores.
Spending increased 1.1 percent at auto dealerships in February after a 0.3 percent drop a month earlier.
Pent-up demand for motor vehicles contributed to the increase as an aging fleet and cheap borrowing drew customers to dealer lots. Cars and light trucks sold at a faster pace in February, pushing the annualized rate of sales to 15.3 million from 14.4 million a year ago, according to data from Ward’s Automotive Group.
Deliveries at Ford Motor Co. surged 9.3 percent last month from a year earlier, the best February in six years. At General Motors Co., sales climbed 7.2 percent, the companies reported March 1.
The gain in February receipts at service stations was the biggest since August and followed a 0.7 percent advance in January. Regular gasoline at the pump averaged $3.67 a gallon in February, up from $3.32 the prior month. The Commerce Department’s retail sales figures aren’t adjusted for inflation.
Spending increased 0.2 percent at clothing chains and 0.5 percent at general merchandise stores, which was the most in almost a year, today’s report showed. Non-store retailers saw a 1.6 percent gain in purchases.
Sales excluding autos, gasoline and building materials -- the figures used to calculate gross domestic product -- climbed 0.4 percent after a 0.3 percent increase in the previous month.
Gains in demand weren’t universal, as department store receipts fell 1 percent in February. Same-store sales for 20 companies tracked by Retail Metrics Inc. rose 1.9 percent in February compared with a year ago, less than the 2.5 percent forecast. Sales at six of 12 chains reported gains, led by apparel stores including Gap Inc. and Limited Brands Inc.