February numbers solid for retailers: Job growth helps sales gain most in 4 months

By Bob Willis

WASHINGTON -- 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. February sales were boosted by a jump in auto purchases and more expensive gasoline.

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."

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 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. 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 0.2 percent drop. Sales at restaurants climbed 1.2 percent, the most in a year.

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