Retail sales in February posted the strongest monthly result since September, up 1.1%, sufficient to meet expectations on the street.
Retail sales fizzled out late last year resulting in a disappointing end to the holiday shopping season, but appear to be off to a good start through the first two months of the year.
Automobile sales were very strong in February after detracting from results in January. Rising gasoline prices also played a role, but sales excluding gasoline and automotive still posted a solid 0.6% advance, suggesting that higher prices at the pump didn’t weigh too heavily on other spending.
The uptick in spending accompanies recent improvement in the jobs market and a surge in confidence that appears to be fueling a greater consumer willingness to spend.
Undoubtedly, mild weather conditions have also contributed to the positive result, making it easier for consumers to get out to the stores.
Broadly, recent economic data has been positive. However, many economists have been pointing toward some skew from the seasonal adjustments possibly overstating the degree of strength. If this ultimately proves to be the case, the potential impact of this should become clearer and could contribute to some modestly disappointing results in the months ahead.
Given the headwinds of higher oil prices and the slowing global economy, the U.S. economy in general – and the U.S. consumer in particular – will need to demonstrate some serious resilience in the months ahead to keep the recent momentum building.
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