Thursday, March 12, 2009
The Commerce Department reported a big upward revision to retail sales in January and a modest decline of just 0.1 percent in February as tumbling automobile sales were offset by higher spending at gasoline stations and clothing stores.
After a virtual free-fall since last September, retail sales in January were revised from a 1.0 percent gain to a 1.8 percent rise, the largest increase in three years, in what is more likely a bounce off of very depressed levels rather than a change in the underlying direction.
Consumer spending is expected to remain very weak as job losses continue to mount.
During February, automobile sales plunged 4.9 percent, the biggest monthly decline since last October, and they are now 26.0 percent below the level of a year ago.
Excluding autos, retail sales rose 0.7 percent last month, following an increase of 1.6 percent in January. The improvement was paced by gains of 2.8 percent and 3.4 percent in gasoline station sales in January and February, respectively, largely as a result of higher prices.
Recall that for much of last year, soaring gasoline prices had helped to mask the overall weakness in retail sales and, as the price at the pump fell last fall, the combination of lower prices and fewer miles driven exacerbated the overall decline.
Other areas with higher sales last month were clothing stores (up 2.8 percent), general merchandise stores (up 1.3 percent) and furniture stores (up 0.7 percent).