Retail sales up 1 percent in February

Retail sales climbed in February by the most in four months, spurred by job gains and more seasonable temperatures.

The 1 percent increase in purchases followed a revised 0.7 percent rise in January that was more than double the previous estimate, Commerce Department figures showed Friday in Washington. February sales, boosted by a jump in auto purchases and more expensive gasoline, matched the median forecast in a Bloomberg News survey.

J.C. Penney and Macy’s were among retailers that topped analysts’ same-store sales estimates, a sign household spending is holding up after the strongest quarterly gain in four years.

While higher fuel costs are a headwind for American consumers, bigger paychecks stemming from a tax compromise reached by President Barack Obama and congressional Republicans may help support demand in coming months.

“Consumers are not yet showing any ill effects from rising food and energy prices,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. “The numbers are consistent with consumers spending at a slower pace than the fourth quarter but still a solid pace of spending.”

The projected gain in retail sales was based on the median forecast of 82 economists in the Bloomberg survey. Estimates ranged from a gain of 0.4 percent to an increase of 1.9 percent after an initially reported 0.3 percent rise in January.

Ten of 13 major categories showed an increase in demand last month, which included gains at department stores and electronics retailers. Service station sales rose 1.4 percent in February, reflecting higher fuel prices. Regular-fuel prices in February reached an average $3.18 a gallon, or 8 cents more than January, according to AAA, the nation’s biggest motoring organization.

Sales climbed 2.3 percent at automobile dealers, consistent with industry figures that showed car purchases climbed last month to a 13.38 million unit annual pace that was the best since the government’s cash-for-clunkers program in August 2009.

“Growing consumer confidence combined with pent-up demand will continue to have a positive influence on industry sales going forward,” Donald Johnson, vice president for North American sales at Detroit-based General Motors, said in a March 1 teleconference. “We continue to believe that we’re going to see this slow-but-steady growth throughout the year.”

Sales excluding autos increased 0.7 percent, matching the median forecast in the Bloomberg survey, today’s report showed. Demand rebounded 0.6 percent at building-material stores after slumping 1.3 percent in January during bad weather.

Purchases excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, increased 0.6 percent for a second month in January.

Department store sales increased 1 percent after a 0.4 percent decrease in January. Purchases at stores selling electronics and appliances rose 0.9 percent after a 0.2percent drop.

Sales at restaurants climbed 1.2 percent, the most in a year. Sales at stores open at least a year at the more than 30 chains tracked by Retail Metrics climbed 4.3 percent in February from a year earlier, an 18th straight gain, surpassing analysts’ estimates for a 3.8 percent increase.

Purchases at stores open at least a year climbed 6.4 percent at Plano, Texas-based J.C. Penney, and 5.8 percent at New York-based Macy’s, company data showed last week. While February sales improved from a month earlier, the retail figures aren’t adjusted for changes in prices, in contrast to the consumer spending numbers in the Commerce Department’s report on gross domestic product.

Even with the February gain and the improved revision to January, first-quarter household purchases may be hard-pressed to match the 4.1 percent pace in the previous three months that was the fastest since 2006. An improving labor market is boosting spending.

Employers added 192,000 jobs in February, the most since last May, and the unemployment rate fell to 8.9 percent, the lowest since April 2009, Labor Department figures showed last week.

The Federal Reserve last week said the labor market improved throughout the country early this year, driven by increasing retail sales and “solid growth” in manufacturing.