Retail sales rise, surprising analysts

WASHINGTON — Americans braved blizzards and overcame job concerns to propel retail sales in February, pointing to a broadening in growth that will help sustain the expansion.

Purchases unexpectedly climbed 0.3 percent, the fourth gain in the past five months, Commerce Department figures showed Friday in Washington. Another report showing consumer sentiment dropped in March for the second consecutive month represented a risk to the improvement in sales.

“The spending numbers look pretty impressive, especially considering they must have been held down a little at least by the snowstorms,” said James O’Sullivan, global chief economist at MF Global in New York. “It adds to evidence that the recovery is gathering pace.”

Macy’s was among retailers that beat estimates last month as customers bought Valentine’s Day gifts and spring merchandise, indicating consumers will contribute more to the economy in coming months. The loss of 8.4 million jobs since the recession began in December 2007 and mounting foreclosures have shaken confidence, one reason some analysts anticipate households will not lead the economic rebound.

The Reuters/University of Michigan preliminary report for March showed its index fell to 72.5 from a final reading of 73.6 in February. The index was forecast to rise to 74, according the median estimate in a Bloomberg News survey of 68 economists.

“Spending will be holding up relatively well for the remainder of this year but it is not going to come roaring back until we get the jobs necessary to lower the unemployment rate,” said Ryan Sweet, an economist at Moody’s Economy.com in West Chester, Pa.

Retail sales were projected to fall 0.2 percent, according to the median estimate of 77 economists in a Bloomberg survey. Forecasts ranged from a decline of 1 percent to a 0.9 percent gain. The Commerce Department revised January data down to show a 0.1 percent increase compared with an originally reported 0.5 percent gain.

Sales excluding autos rose 0.8 percent, exceeding all estimates of economists surveyed.

“The storms were apparently not quite as disruptive as anticipated,” said Adam York, an economist at Wells Fargo Securities in Charlotte, N.C., whose forecast for a 0.6 percent gain excluding autos was the highest of those surveyed. “As we start adding jobs in the spring, employees will gain income and hours and retail sales should follow.”