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US retail sales surge in February

Wednesday, March 13 12:46:03

U.S. retail sales rose more than expected in February as Americans bought motor vehicles and a range of other goods even as they paid more for gasoline, suggesting consumer spending this quarter will hold up despite higher taxes.

The Commerce Department said today retail sales increased 1.1 percent, the largest rise since September, after a revised 0.2 percent gain in January.

Economists polled by Reuters had expected retail sales, which account for about 30 percent of consumer spending, to rise 0.5 percent last month after a previously reported 0.1 percent gain in January.

So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, rose 0.4 percent after advancing 0.3 percent in January.

The rise in core sales was the latest to suggest momentum in the economy as fiscal policy tightened, marked by the end of a 2 percent payroll tax cut and an increase in tax rates for wealthy Americans on Jan. 1.

Job gains accelerated in February and manufacturing put in its best performance in 1-1/2 years. Reuters