The first signs of an improving economy and better weather are here, as the US retail sales advanced by 0.3 percent in February against economists’ expectations of 0.2 percent, according to statistics reported by the Commerce Department in Washington on Thursday.
The 0.2 percent median forecast had been of 84 economists that had been surveyed by Bloomberg. A similar survey led by Reuters had proven the same expectations. The positive retail sales indication is a huge jump from the 0.6 drop in January, with nine out of 13 major categories showing increases.
Harsh weathers with bitter cold and snow during December 2013 and January 2014 had impacted economic activity adversely and US retail sales had seen a consecutive decline. Sales being in the green for the first time in three months against expectations have raised hopes of economists.
Senior economist at Ameriprise Financial Inc. in Detroit, Russell Price told Bloomberg that “We will see a little bit more traction on the consumer side as the weather improves and people get a little bit more willing to leave the house.” Deputy chief economist at TD Securities in New York, Millan Mulraine told Reuters, “The consumer appears to be back in the game.”
Valentines Day falling over the weekend helped US retail sales too as consumer purchases got pushed over two additional days.
Non-store retailers, including internet stores, led the gains in February, signifying that customers preferred to shop from home rather than stepping out in the poor weather. A 1.2 percent incline was seen in the category that includes purchases made online, the most since July 2013.
Sporting goods purchases increased by 2.5 percent and department store purchases increased by 0.7 percent, which were the biggest advances since January 2013. Sales rose by 0.3 percent at building materials and garden equipment stores. There were also gains in receipts at furniture stores and clothing stores.
In other gains reflected in February, data from Ward’s Automotive Group showed that Subaru sales climbed 24 percent, Jeep sales increased by 47 percent and cars and light trucks were sold at a 15.3 million annualized pace in February compared with a 15.2 million rate in January. However, sales at Ford Motor Co. declined 6.1 percent for the same month last year, more than the 5.3 percent drop estimated by analysts.
In another report, figures of the Labor Department showed an unexpected decline in the number of applications for unemployment insurance payments by 9,000 to 315,000 in the week ended March 8. This is the lowest since the end of November 2013. A median forecast of 53 economists had expected jobless claims to rise to 330,000, according to a Bloomberg survey. Meanwhile, payrolls grew by 175,000 jobs in February.
“Stronger job and income growth should create a more favorable environment for consumer spending,” Lowe’s Chief Executive Officer Robert Niblock had said on a Feb. 26 earnings call.
According to data from the Federal Reserve, household wealth rose by $2.95 trillion in the fourth quarter to a record $80.7 trillion, giving consumers an improved means to spend.
Businesses that plan to expand their employees include Lowe’s Cos. and Home Depot Inc. with the former announcing to add 25,000 seasonal staff for the industry’s busiest season and the latter planning to add 80,000 positions for the spring and summer this year in hopes to further improve US retail sales and exceed expectations for the entire year.
By Faryal Najeeb