Americans went on a buying binge in February,
pushing up retail sales by 1.1 percent, the government said today.
The advance came despite rising interest rates, a jump in oil
prices and stock market volatility factors that could have
The 1.1 percent advance in retail sales marked the strongest
pace since a 1.9 percent rise in December and was bigger than the
0.9 percent increase many analysts were expecting.
The Commerce Department said total retail sales rose to a
seasonally adjusted $265.7 billion last month, boosted by a big
jump in sales at grocery stores and at automobile dealerships. In
January, Americans spent more selectively, causing total retail
sales to rise by just 0.4 percent.
With plentiful jobs, low inflation and rising incomes Americans
are feeling wealthy and in the buying mood.
The robust sales in February came despite a number of factors
that could have slowed shoppers down.
The Federal Reserve has raised interest rates four times since June, totaling a full percentage point. Even though those actions
have made borrowing more expensive for consumers and businesses,
those higher rates have failed to significantly slow the economy to
a pace that can be sustained without sparking inflation.
Given that, most analysts expect the Fed will boost rates again when they meet next week.
In addition, rapidly rising crude oil prices have sent heating oil prices soaring and gasoline costs surging, another factor that could have called a pullback in consumer spending, economists said.
Consumer spending, which accounts for two-thirds of all economic activity, has been a locomotive of the speeding economy, which grew by a breakneck 6.9 percent annual rate in the last three months of
The big gain in total retail sales in February was led by a 1.8 percent increase in sales at grocery stores, which fell 5 percent
in January. After eating food stockpiled to counter any problems
with the Y2K computer changeover, consumers flocked to grocery
stores last month after staying away in January, economists said.
Sales of new cars and trucks, meanwhile, rose a solid 1.4
percent, following a strong 3 percent gain the month before. The
auto industry reported a record 17 million cars and light trucks
sold in 1999 and is projecting robust sales for this year.
Excluding the volatile autos category, retail sales went up by 1 percent, stronger than the 0.7 percent gain many analysts
predicted. That followed a 0.5 percent drop in January.
Gasoline sales rose by a big 4.3 percent in February, reflecting higher prices at the pump. That was the largest jump since a 5 percent gain in April. In January gas sales fell by 0.6 percent.
Clothing stores sales also showed a sizable gain of 1.1 percent last month, following a rise of 0.8 percent in January.
At furniture stores, sales rose by 0.7 percent last month after a 1.0 percent gain. Department stores sales grew by 0.6 percent,
following a 0.9 percent gain.
Sales at hardware and building supplies stores, however, fell by 0.8 percent after posting a 1.2 percent drop in January. At bars
and restaurants, sales were unchanged, while drug store sales rose
a slim 0.1 percent following a 1.4 percent decline in January.