NEW YORK – 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 on Wednesday 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.
JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDEMARKETS, WOODCLIFF LAKE, NEW JERSEY:
"In the US economy everything depends on the consumer. Business investment, inventories and particularly hiring anticipate a sustained rise in real consumption. Today's retail sales at 1.1 percent is good, but it may have a large inflation component. It will, however, support the higher interest rates that have been underpinning the dollar and the equities."
STOCKS: U.S. stock index futures turned positive
BONDS: U.S. bond prices pared price gains.
FOREX: The dollar erased losses against the yen and extended its gains against the euro
(Americas Economics and Markets Desk; +1-646 223-6300)