February US Retail Sales Strongest in Four Months
Fri, Mar 11, 10:32 AM ET, by RetailSails.com
US retail sales rose at the fastest pace in four months during February, as improvements in the job market and consumers’ views on their personal finances have so far offset worries about inflation, and January storms probably pushed sales into February. Unfortunately, the gains were largely due to brisk auto sales that were the strongest in nearly 10 years and surging gas prices at the pump.
The Commerce Department reported this morning that Advance Estimates of U.S. Retail and Food Services sales for February rose an adjusted 1.0% from the prior month to $387.1 Billion, below the 1.2% gain analysts were expecting, while sales increased 9.1% (unadjusted) compared to the year-ago period. This was the 8th straight monthly increase and 16th straight year-over-year gain after 15 consecutive months of declines, which was the longest such streak on record.
Total sales excluding Autos were up 6.1% in February from the year-ago period, while total sales less Autos and Gas Stations showed a 5.1% year-on-year increase. Nominal sales have finally returned to peak levels – for the third straight month total adjusted sales reached record levels, but unadjusted sales were still just 0.5% higher than February 2008.
Gains were led by Auto & Parts Dealers (23.8% YoY / +2.3% MoM), which had their best month since October 2001, as well as Gas Stations (+13.7% YoY / +1.4% MoM), and Miscellaneous Store retailers (+10.5% YoY / +2.0% MoM). Meanwhile, Department Stores (-1.4% YoY / +1.0% MoM), Furniture & Home Furnishing Stores (-3.9% YoY / -0.8% MoM and Electronics & Appliance Stores (-1.7% YoY / +0.9% MoM) continue to be laggards.
While consumer confidence has improved markedly from the depths of the recession, those gains could prove to be fleeting. Based on recent results from recent surveys, gas and food price inflation worries have already started to eat into discretionary spending, and it looks like that will continue. The Energy Information Administration (EIA) projects the average U.S. household will spend about $700 more for gasoline in 2011 than it spent last year, bringing total motor fuel expenses up 28% to $3,235.
The Bloomberg Consumer Comfort Index had risen to a nearly three-year high last month, but fell back to a four-week low last week as surging gas prices offset improvements in consumers' outlook on their finances and the economy. In addition, the preliminary March reading for the Reuters/University of Michigan Consumer Sentiment Index plunged to 68.2 after reaching the highest level in three years (77.5) in late February.
“Rising gasoline prices extracted a toll," said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Those at the lower end of the income ladder and those in the middle are being squeezed by rising costs of fuel and food, which does not bode well for discretionary spending.”
Retailers for the most part reported strong 4th quarter earnings on the best holiday season in years. However, outlooks for the remainder of the year were cautious as companies are contending with their own rising input costs and have tough decisions to make whether to pass those costs onto consumers.
Click here for more detailed results of February retail sales by line of business.
SDI Glossary: "price" Definition
This Article's Word Cloud:
More articles: 1 2 3 4 5 6 7 next »