U.S. retail sales probably climbed in February by the most in four months, spurred by job growth and more seasonable temperatures, economists said before a report this week.
The projected 1 percent gain would follow a 0.3 percent January increase, according to the median forecast of 63 economists surveyed by Bloomberg News ahead of Commerce Department figures March 11. Other reports may show the trade deficit widened in January and consumer confidence fell this month as gasoline prices rose.
J.C. Penney and Macy’s Inc. (M) were among retailers that topped analysts’ sales estimates, a sign household spending regained momentum after a weather-restrained January. While higher fuel costs may be concerning Americans, bigger paychecks thanks to the tax compromise reached by President Barack Obama and congressional Republicans are probably preventing demand from slipping for now.
“Chain-store sales did well, automobile sales improved sharply and employment bounced back” last month, said Brian Bethune, chief U.S. financial economist at IHS Global Insight in Lexington, Massachusetts. “Households may have realized that they have some extra cash in their pockets due to this year’s cut in the payroll tax.”
Retail sales excluding automobiles and service stations rose 0.4 percent in February, the most in three months and twice the January gain, according to the Bloomberg survey.
First-Quarter Slowdown
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. Combined with January, the February retail sales figures indicate first- quarter household purchases will cool from a 4.1 percent pace in the previous three months that were the fastest since 2006.
The retail sales data may reflect higher gasoline prices. Regular fuel 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 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.
Retailer Shares
Investors have driven up retailer shares as spending increases. The Standard & Poor’s Supercomposite Retailing Index, which includes Macy’s and Gap, has gained 21 percent in the 12 months through March 4, compared with an 18 percent advance for the broader S&P 500.
Americans also filed into dealer showrooms in February to take advantage of incentives. Auto sales rose to a 13.38 million annual rate, the highest level since August 2009 when the government’s cash-for-clunkers program boosted purchases, according to industry data.
“Growing consumer confidence combined with pent-up demand will continue to have a positive influence on industry sales going forward,” Donald R. Johnson, vice president for North American sales at Detroit-based General Motors Co., said in a March 1 teleconference. “We continue to believe that we’re going to see this slow-but-steady growth throughout the year.”
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.
Beige Book
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.
“Retail spending strengthened compared with a year ago across all Districts except Richmond and Atlanta,” the Fed’s Beige Book of regional economies said.
Another report from the Commerce Department on March 10 may show the trade deficit widened to $41.5 billion in January from $40.6 billion the prior month, according to the median forecast of economists surveyed by Bloomberg. The gain may reflect faster growth in imports, as wholesalers stocked shelves with goods made overseas to meet rising demand.
Wholesale inventories probably climbed 0.9 percent in January following a 1 percent increase, economists forecast the Commerce Department will report on March 9.
The Reuters/University of Michigan preliminary index of consumer confidence for March may show sentiment eased to 76.5 from 77.5 at the end of February, according to economists’ forecasts. That report is slated for March 11.
Bloomberg Survey
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Release Period Prior Median
Indicator Date Value Forecast
================================================================
Cons. Credit $ Blns 3/7 Jan. 6.1 3.4
NFIB Optimism Index 3/8 Feb. 94.1 95.0
IBD/TIPP Conf. Index 3/8 Feb. 50.9 51.7
MBA Mortgage Applicatio 3/9 5-Mar -6.5% n/a
Whlsale Inv. MOM% 3/9 Jan. 1.0% 0.9%
Trade Balance $ Blns 3/10 Jan. -40.6 -41.5
Initial Claims ,000’s 3/10 5-Mar 368 378
Cont. Claims ,000’s 3/10 26-Feb 3774 3750
BCCI 3/10 6-Mar -39 n/a
Federal Budget $ Blns 3/10 Feb. -220.9 -227.5
Retail Sales MOM% 3/11 Feb. 0.3% 1.0%
Retail ex-autos MOM% 3/11 Feb. 0.3% 0.7%
Retail exauto/gas MOM% 3/11 Feb. 0.2% 0.4%
U of Mich Conf. Index 3/11 March P 77.5 76.5
Business Inv. MOM% 3/11 Jan. 0.8% 0.8%
================================================================Source: Bloomberg By 
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